Facilities Management Outsourcing Central and Local Government Sector Report UK Analysis

Transcription

1 Facilities Management Outsourcing Central and Local Government Sector Report UK Analysis Published: 14/11/2017 / Number of Pages: 66 / Price: Introduction and Overview The 5th edition of 'Facilities Management Outsourcing - Central and Local Government Sector Report - UK Analysis' incorporates original input and primary research and represents an up to date and comprehensive review on the provision of Facilities Management and 'bundled' services in these sectors. The report offers a unique review of this substantial market, focusing on the outsourced management and delivery of non-core services within central and local Government, and social housing sectors. Key Issues analysed include: FM Outsourcing across the Central and Local Government Market - Size, recent trends and key market influences, forecasts and future trends. Analysis of three sectors - Central Government, Local Government and Social Housing - performance by sector, penetration, trends and potential opportunities. Review of Market Structure and Leading Providers - changing supply structure, diversification of service provision and company profiles for the leading contractors. Areas of particular interest include: Market polarisation towards large contractors offering a comprehensive array of services and niche sector specialists. Market activity within the central and local Government sector from 2012 to 2016, with forecasts through to Reduction of the Government Estate on the Central & Local Government FM market, and move towards fewer, larger properties. Greater cooperation and collaboration between central and local authorities, and the impact upon FM services contracts and delivery. Detailed market data and insight on the facilities management market by AMA Research, a leading UK provider of construction market intelligence. Some of the companies included:

2 Amey Group, Apleona HSG, Aramark, Arcadis, Babcock International Group, BAM Facilities Management, Bellrock, Bouygues Energies & Services, Carillion, CBRE Group, Compass Group, Emcor UK, Engie UK, Eric Wright Group, G4S Facilities Management, Galliford Try, Gardiner & Theobald, Integral UK, Interserve, ISS UK, Keepmoat Homes, Kier Group, Mapeley, Mears Group, Mitie, Morgan Sindall Property Services, NG Bailey, Parkwood Group, Pinnacle PSG, Places for People Leisure, Robertson Facilities Management, Serco Group, Servest, Skanska Facilities Services, Sodexo Group, The Capita Group, The OCS Group UK, Turner Facilities Management, Vinci Facilities, FM Outsourcing within the Central & Local Government Sector Sectors included - Central Government, Local Government and Social Housing. Health and education sectors are excluded as they are subject to separate analysis. Review of Central / Local Government and Social Housing FM Outsourcing market - estimates of market size from , with forecasts for the period from 2017 to Growth rates and opportunities per sector, mix by sector, mix by service, indications of market maturity. Key market influences - macroeconomic factors, construction output, and legislation. Market maturity in some end use sectors, future opportunities, greater client integration, greater emphasis on added-value FM contracts, tighter budgetary control in most sectors etc. Future opportunities and threats. Key market changes - legislation changes, greater diversification of service provision, increasing rationalisation of government estate, trend towards TFM and 'bundling'. Prospects for the FM Market - covering macro-economic influences, outlook by end use sector, key potential growth areas, trends in service provision, impact of technological changes and challenging market conditions over the short to medium term, legislation and other key influences. Key Central & Local Government End Use Sectors Central Government FM Market size, trends and key influencing factors and estate estimations and operational costs, with a focus on the Ministry of Justice, Department of Work and Pensions, HM Revenue & Customs and Business, Skills & Innovation. Local Government FM Market size, trends including impact of government funding cuts, and key influencing factors. Focus on the Police Service, Leisure and Cultural Facilities, and Fire and Rescue Services. Social Housing FM Market Size, funding, trends and key influencing factors. Contractors Review Review of origins of FM companies and Supply Structure. Share groupings of the major companies across the FM industry. Key trends -recent acquisitions & mergers, market entrants, impact of market maturity, expansion and diversification of service provision, market consolidation. Market profiles for leading FM providers to central and local Government application areas, covering over 40 major providers and niche specialists - outlines include company size, growth trends, areas of specialisation, some sector strengths and major contracts. The Overall FM Outsourcing Market

3 Overview of the overall bundled Facilities Management Market - estimates of total market size from , with forecasts for the period from 2017 to Key market influences and prospects - macroeconomic factors, diversification in service provision, impact of technological changes, trend towards TFM and 'bundling' and legislative influences. Report Summary The market for facilities management outsourcing within the central and local government sector saw a substantial value reduction in 2016 compared with This has been caused by a variety of factors including political and economic uncertainty caused by Brexit and the General Election, the ongoing pressure over budgets, and ongoing rationalisation of the estate and/or assets. This reduction in follows several years of fluctuation within the sector meaning that market value is still higher than it was in The market continues to benefit from a shift away from single service contracts towards bundled and TFM packages. The trend for clients to outsource an increasing number of FM services, as well as to reduce procurement costs through seeking 'one-stop-shop' solutions is expected to continue, favouring larger FM providers able to supply the full range of services required. In another market trend, FM providers have been developing additional skills and knowledge to ensure they can offer added value services. Examples include knowledge on latest health and safety issues, environmental issues and, in some cases, employment law. As such, many are diversifying into wider back office areas beyond the scope of this report. A factor supporting future growth is the continued penetration of outsourcing in both Central and Local Government, especially in the latter sector where the potential for further development is thought to be good. Growth is also likely to be supported by the greater range of services being outsourced. Energy management has become a key offering for many FM providers, for example, given the environmental and sustainability concerns affecting much of how public organisations are run Going forward, the market is forecast to experience steady growth from 2017 up to 2021, with the market stabilising after several years of fluctuation. This stabilisation is set to occur as the UK's political and economic situation becomes clearer, with government agencies being better able to plan ahead. Much of the predicted growth is expected to be driven by improvements within the social housing sector, as housing associations and local authorities enhance their operational efficiencies and more funding is made available for maintenance of properties. List of Contents Contents Listing 1. INTRODUCTION BACKGROUND SOURCES OF INFORMATION 6 2. SUMMARY & MARKET PROSPECTS EXECUTIVE SUMMARY MARKET PROSPECTS 9 3. ECONOMIC ENVIRONMENT GDP 11

4 3.2 INFLATION & INTEREST RATES UNEMPLOYMENT HOUSEHOLD CONSUMPTION HOUSING & CONSTRUCTION STERLING POPULATION PROFILE CONCLUSIONS FM IN THE CENTRAL & LOCAL GOVERNMENT SECTORS FACILITIES MANAGEMENT OUTSOURCING MARKET Definition FM Market Size and Trends CENTRAL & LOCAL GOVERNMENT FM MARKET DEFINITION CENTRAL & LOCAL GOVERNMENT FM MARKET SIZE AND TRENDS KEY MARKET INFLUENCES Public Sector Construction Output Public Private Partnerships Legislation END USE SECTORS WITHIN CENTRAL & LOCAL GOVERNMENT END USER MIX SOCIAL HOUSING FM OUTSOURCING MARKET CENTRAL GOVERNMENT FM OUTSOURCING MARKET Holdings and Operating Costs Department of Work and Pensions Ministry of Justice Department for Business, Innovation & Skills HM Revenue and Customs 45

5 5.4 LOCAL GOVERNMENT FM OUTSOURCING MARKET The Police Service Leisure & Cultural Facilities Fire and Rescue Services CONTRACTORS' REVIEW ORIGINS & SUPPLY STRUCTURE MARKET SHARES COMPANY PROFILES Leading Contractors in Central & Local Government Other Large Companies in the FM Market 61 Tables and Charts CHART 1: UK MARKET FOR OUTSOURCED FM IN CENTRAL AND LOCAL GOVERNMENT BY VALUE ( M) 8 TABLE 2: GDP DATA KEY CONSTITUENT ELEMENTS 11 CHART 3: INTEREST RATES AND INFLATION (CPI) FROM CHART 4: PDI & SAVINGS RATIO AT CURRENT PRICES TABLE 5: EXCHANGE RATE FLUCTUATIONS STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 16 CHART 6: UK BUNDLED FM OUTSOURCING MARKET AT CURRENT PRICES ( MILLION) 19 TABLE 7: UK CENTRAL & LOCAL GOVERNMENT FM MARKET (CURRENT PRICES) 22 TABLE 8: PUBLIC SECTOR CONSTRUCTION NEW WORK OUTPUT ( BN) AT CURRENT PRICES RESIDENTIAL, NON- RESIDENTIAL 25 CHART 9: PUBLIC SECTOR NEW WORK BY END USER 2016 BY VALUE (%) 26 TABLE 10: CURRENT PFI/PF2 PROJECTS ACROSS GOVERNMENT BY DEPARTMENT CHART 11: NUMBER AND COMBINED CAPITAL VALUE OF PFI PROJECTS SIGNED ANNUALLY 2005 TO MARCH TABLE 12: PROJECTED SERVICE PAYMENTS UNDER PFI/PF2 CONTRACTS /2011 TO 2020/ CHART 13: MIX OF FM END USERS BY VALUE 2016 (%) 33 TABLE 14: DWELLING STOCK: BY TENURE, UK THOUSANDS OF DWELLINGS

6 TABLE 15: SELECTED EXPENDITURE ON HOUSING ASSOCIATION PROPERTIES, VALUE ESTIMATES M 36 TABLE 16: MANAGEMENT AND MAINTENANCE COSTS ON LOCAL AUTHORITY PROPERTIES, VALUE ESTIMATES M. 37 CHART 17: CENTRAL GOVERNMENT ESTATES STRUCTURE 38 TABLE 18: TOTAL AREA OF THE MANDATED ESTATE AT JANUARY 2016 AND CHANGE SINCE 2015 AND 2012 (M2, % CHANGE) BY DEPARTMENT 39 TABLE 19: TOTAL REPORTED ANNUAL RUNNING COST 2015/16 BY GOVERNMENTAL DEPARTMENT 41 TABLE 20: COST PER SQUARE METRE 2015/16 BY MAJOR GOVERNMENTAL DEPARTMENT 42 TABLE 21: PROPERTY COST AND OCCUPIED SPACE PER FULL TIME EMPLOYEE TABLE 22: TOP 20 FM SUPPORT SERVICES COMPANIES IN THE UK 52 The 'Facilities Management Outsourcing - Central and Local Government Sector Report - UK Analysis'costs 845+VAT (if applicable) for a PDF version. Other formats are available -click here for a information about available report formats. All AMA reports are sold with a single user licence as standard. For more information about AMA licences click here. About AMA Research Established in 1989, AMA Research is widely recognised as the leading specialist provider of market research to the UK building and construction industries. AMA s research and analysis goes beyond the more commonly available range of statistical and company information to provide expert, informed commentary and in-depth market analysis, making the reports a valuable and relevant resource for understanding the UK s construction and associated markets. We offer the following: Consultancy and bespoke research projects Published research reports high quality, detailed research reviews covering a wide range of environmental, building and construction products. Our extensive experience and in-house research database enables us to offer specialised and flexible bespoke research services, as well as giving excellent value for money. Our experienced in-house team of researchers are experts in their fields and adept in conducting original and relevant research for reports or bespoke projects, and key decision makers across the building and construction industries, both in the UK and abroad, frequently use our high-quality reports as their primary source of market data. To find out more about AMA Research, visit: or call us on