Public sector cuts limiting FM outsourcing potential

A study by AMA Research has found that growth in facilities management outsourcing has been limited by cuts in public sector budgets and closure of a number of facilities.

In 2017, the market was estimated to be worth £3.2 billion – approximately two per cent lower than in the previous year – with the number of schemes for healthcare and education sectors being signed off on a year-by-year basis also declining as a result of difficulty in obtaining finance. Both sectors have witnessed a gradual trend towards bundled service and TFM contracts, largely at the expense of single-service varieties.

In particular, the health sector has been ‘impacted by pressure to minimise operational costs to protect frontline services’, with the reduction in PFI projects limiting growth within the facilities management services sector.

Fiona Watts of AMA Research said: “The outlook for the FM outsourcing market within healthcare and education is considered moderately positive over the short to medium term, although growth within both sectors is likely to depend upon the prevailing political and economic situation. Government encouragement of great er private sector involvement is expected to continue, providing some optimism in the market.”