Table of Contents
AMA Research have published the 4th edition of the 'Facilities Management Outsourcing - Health and Education Market Report – UK 2015-2019 Analysis'. The report offers a unique view of the market for outsourced management and delivery of non-core services with a specific focus on the Health & Education sectors.
Key issues covered:
Specific analysis of the FM Outsourcing market within Health & Education – sector sizes & trends, key market influences, government expenditure plans & PFI/PPP, penetration of FM outsourcing, forecasts and potential opportunities.
Review of market structure and leading providers – changing supply structure, diversification of service provision and company profiles for the leading contractors within Health and Education sectors.
Overview of the broader UK FM outsourcing market - size, recent trends and key market influences, forecasts and future prospects.
Key areas of insight include:
Market size of FM Health & Education from 2009 to 2015, with forecasts through to 2019.
Key FM contractors – key players, market position etc.
Mix of in-house, single, bundled TFM service provision in the education and health sectors over the medium term.
Some of the companies included:
Amey Group, Aramark UK, Babcock International Group, Balfour Beatty Workplace, BAM Construct, Bellrock, Bouygues Energies and Services, Carillion Facilities Management, Cofeley, EC Harris, Emcor Facilities Services UK, Eric Wright, G4S Facilities Management, Galliford Try, Gardiner & Theobald, Graham FM, Integral UK, Interserve Support Services, ISS UK, John Laing Integrated Services, Kier Building Maintenance, Kier Facilities Services, MITIE, Norse Group, OCS Group, Parkwood Holdings, Pinnacle PSG, Rentokil Initial Facilities, Robertson Facilities Management, Ryhurst, Serco Group, Skanska Facilities Services, Sodexo Facilities Management, Turner Facilities Management, Vinci Facilities, VolkerFitzpatrick.
Key areas covered in the report include:
FM OUTSOURCING - HEALTH AND EDUCATION SECTORS
Overview of the overall FM Market - market definition in terms of sectors –total market size 2008-18 for bundled FM services – Review of FM Outsourcing market within Health & Education – estimates of market size from 2009-2015, with forecasts for the period from 2016 to 2019.
Key market influences – capital expenditure programmes, penetration of outsourcing, increasing market maturity in the healthcare sector, construction output and developments within the PFI/PPP sector. Future opportunities and threats – impact of ‘Living Wage’ etc.
FM Market mix among Health and Education – recent growth rates and changing market mix.
Penetration of Outsourcing in the Health and Education sectors – level of maturity, services outsourced, trend to TFM and bundled services.
FM IN THE HEALTH SECTOR
Market size from 2009-2015, with forecasts from 2016 – 2019. Key market influences, drivers for growth, future opportunities and threats.
Review of major capital expenditure programmes: PFI/PPP, LIFT, Procure 21, Treatment Centres Programme.
Service provision mix – in-house, singe, bundled, TFM contracts; and mix of services provided through outsourcing - cleaning, catering, building & engineering maintenance, portering, laundry etc.
End Users of Bundled/TFM services – acute, mental health, primary care/GPs etc – mix of service provision within sectors – recent trends, future prospects.
Trends in private sector, dental groups, care homes – leading players by sector
FM IN THE EDUCATION SECTOR
Market size from 2009-2015, with forecasts from 2016 – 2019. Key market influences, factors influencing developing pace of growth. Influences behind anticipated growth levels over the medium term alongside a review of potential threats.
Review of major capital expenditure programmes: PFI/PPP, Priority Schools Building Programme, Higher Education.
Service provision mix – in-house, singe, bundled, TFM contracts; and mix of services provided through outsourcing - cleaning, catering, building & engineering maintenance, grounds maintenance etc.
Facilities Services Costs – by sector. Service costs by education sector (primary, secondary) – cleaning, catering, building maintenance, grounds etc.
Estimation of the mix of end users and the services required in each sector.
Key trends – recent acquisitions & mergers, market entrants, business failures, impact of market maturity, expansion and diversification of service provision, market polarisation.
Review of origins of FM companies and Supply Structure.
Market Shares of and company profiles for leading FM providers to Health and Education covering over 40 major providers and niche specialists – outline includes overview of market shares, company size, growth trends, areas of specialization, sector strengths and major contracts.
The potential of facilities management outsourcing in the health and education sectors has been limited since the beginning of the review period, as increasing use of outsourcing was offset by the decline in new large scale projects coming to the market, due to the cancellation of large scale capital expenditure programmes in 2010 and budget cuts introduced in 2012. Healthcare represents the largest sub-sector in this market, while FM outsourcing within the education sector is less well established. The cancellation of Building Schools for the Future (BSF) and concern over the value of some long term PFI service contracts, coupled with the restriction on budgets, has seen new contracts decline and some renegotiation to bring down existing costs.
The underlying trend towards outsourcing an increasing array of services, including a gradual shift towards ‘bundled service’ and TFM contracts, has been a positive influence on growth, adding to contract values. This should continue as efficiencies are sought in order to operate within ever tightening budgets, prompted further by Government focus on private sector involvement and greater levels of co-operation across regions and departments. There has continued to be merger and acquisition activity amongst FM providers, as well as business failures and market withdrawals. This has been influenced by market maturity, changes in procurement practices and moves by larger providers to expand services and geographic coverage. This trend towards consolidation is likely to continue over the medium term.
The outlook for the FM outsourcing market within healthcare and education is considered to be relatively positive over the short to medium term, reflecting government focus on private sector involvement and the need to work within restricted budgets. Focus on ‘Value for money’ continues to support the market in terms of outsourcing penetration, although it can limit individual contract values. The National Living Wage, due to become compulsory from 2016, but already starting to be implemented by some of the larger organisations, is likely to impact on margins and contract prices in such a labour intensive sector.
The public health sector has undergone a period of restructuring which limited the development of the FM market in this area. Changes came into effect in April 2013 and the market should have started to normalise from these effects. The education sector, which had been expected to represent one of the most dynamic end use sectors for FM outsourcing, is likely to be limited following the cancellation of BSF. Nevertheless, the scope for increased penetration remains a positive influence, supported by the Government’s encouragement of more cross-regional co-operation in procurement. Energy conservation is also likely to remain a key driving factor within the FM market.
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