Case study Asset Management costs

During an Asset Management audit we identified that the actual costs of component replacement work being undertaken was significantly in excess, (appropriately 44%), of the corresponding Schedule of Rates (SoR) values. The value included in the 30-year Business Plan for component replacements was based on the SoR rates. Extrapolation indicated that the long term costs provided for within the Business Plan would be understated by approximately £25m. In addition, we identified issues in respect of communication between the Asset Management and Finance Teams and in reporting to Board.