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Trend to outsource government FM will carry on

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The outsourced, bundled facilities management market in central and local government is estimated to have grown by around 3 per cent in 2015, compared with the market value in 2014, according to a report by AMA Research.

Having experienced good growth through to 2011, reflecting the move towards greater levels of outsourcing of a wider range of services and a high level of investment in facilities, the market declined in 2012 as government spending fell and the central and local government estate underwent consolidation to manage national debt and improve carbon emissions. 

 

This slow growth continued into 2014. Factors supporting the market include increasing penetration within central and local government, a move towards a greater array of services being outsourced, and the need for government departments to achieve significant cost savings to meet tighter budgets, with the government encouraging greater use of the private sector partners to help achieve this. 

 

Nevertheless, there remains sustained pressure on margins, reflecting consolidation in the market and greater numbers of larger FM contractors who are intent on ensuring that they win enough business to fill their capacity. 

 

In addition, the government’s continuing activity to reduce the size of its estate has continued to have an effect on contract opportunities – both in central government and local government sectors. The market for FM in both sectors is expected to improve, growing by 3 per cent in 2015 and remaining positive through to 2019, says the report.

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BDC 315 : Apr 2024