Essex Council to save millions by consolidating FM contracts

10 December 2010
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10 December 2010 | Lindsay Clark

Essex County Council aims to save up to £3.1 million by consolidating its facilities management (FM) contracts.

According to council cabinet papers, the authority could make savings by slashing around 670 suppliers within the FM category down to one or two. Currently, FM suppliers produce 90,000 invoices annually, creating a huge administrative burden, the documents said. 

The present annual budget for FM services is £24 million, comprising of £17.9 million of third-party contracts and £6.1 million staffing costs. The council expects to award the contracts to its chosen vendors to manage the services externally by October next year.

The anticipated annual revenue savings for the favoured strategy are in the range of £2.2 million to £3.1 million from 2012. The decision follows the development of a category plan for FM services, which gave a number of options for improved service and savings.

“The precise level of savings will not be known until tender responses are received from potential suppliers,” the council document said. “However, soft market testing provides ample confidence that these estimates are achievable. As such, the project should pay for itself within five months of commencement.”

The council did not reveal the life-span of the proposed outsourcing arrangement.

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