At some point in the next few weeks Stop and Think! believe that the government will relax the 2 m social distancing to 1 m. This is because we have reached and passed the Crossover Point at which the economic impact of Covid-19 gains a more intense focus than the direct human cost. This reduced social distance requirement will cross the threshold that allows most organisations to function. Businesses will then seek to resume operations swiftly, as they have mostly expended reserves and used stock, leaving them with little resilience.
The current Stop and Think! view is that the FM cost of doing business must be reduced by 30% in the first instance. The economic down turn is estimated at 14 % reduction in GDP overall: 20% + for April and even higher in May. Huge stimulus packages are being positioned to try and achieve a swift economic bounce back on exit from lock down. There are even discussions about extending the furlough by sector.
The point is that preparing for the re-occupation of buildings is merely a transactional operational process, for which there is much guidance available from the market including Stop and Think!; The FM focus now needs to identify, plan, and implement tactics to achieve a cost reduced financial run rate targeting a minimum 30% cut in spending:
- Controlled resumption of services. “Turn it on when it is needed and not before”
- Lowest possible service scope level without compromising safety and legislative compliance. Particular focus on the removal of welfare services.
- Stop all projects (revenue or Capital) unless deemed necessary for the operation of the business
- Reduce the cost to spend £1 to less than 20p
Governmental help will be available, but not to the level that could facilitate a return to yesteryear. There will still be a major economic downturn to respond to; and Stop and Think! believes it is time to prepare.