UK facilities management outsourcing set to grow by 5 per cent

6 March 2015

Outsourcing in the UK facilities management (FM) sector is expected to grow by 5 per cent annually over the next couple of years.

A study from AMA Research, The Facilities Management Outsourcing Market Report – UK 2014-2018 Analysis, said outsourcing was still likely to be seen as a way to make savings in the wake of the recession.

Last year, the market for outsourcing bundled and total facilities management services was valued at almost £19.5 billion, and is forecast to reach £23.2 billion by 2018. Over the next couple of years, key procurement opportunities in the public sector are likely to be with local authorities, the report says.

The overall FM market will also continue to benefit from the shift away from single service contracts towards bundled services and total facilities management packages. The trend for private and public sector clients to outsource an increasing number of services, as well as to reduce procurement costs through seeking ‘one-stop-shop’ solutions is expected to continue.

This will add to contract values and favour larger facilities management providers that can supply a full range of services. Keith Taylor, director of AMA Research, said the impact of public sector spending cuts was not yet clear.

“The government estates will undoubtedly shrink but our forecasts assume that outsourcing will be viewed as a means of saving costs, more so than an expenditure element to be cut,” he said. "In addition some government cuts in the education sector, for example, have not led to construction output reductions, as universities and academy schools, for example, appear to have been successful in drawing in private sector investment.”

The corporate market makes up 50 per cent of the total facilities management outsourcing market, with central and local government accounting for around a quarter, according to the report. Healthcare and education, the fastest growing sector in recent years, has slowed sharply, now representing 18 per cent of the market.

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