While there is some information on the level of
new build activity within the education market, the level of RMI
(Repairs, Maintenance and Improvement) activity has always been
difficult to quantify due to the fragmented way budgets are
managed and controlled.
However, AMA Research have recently published a
unique review assessing the Education RMI market in terms of
overall spend, sector splits, spend programmes, levels of
responsibility etc.
The total market for building related RMI works
in the non-residential sector is estimated at around £16 billion
at contractors output levels. Of this, public sector works account
for around £4.5 - 5 billion and private sector work for over £11
billion. Education RMI work cuts across both public and private
sectors and is currently estimated to be worth around £2.4 billion
– a major sector in overall RMI work. As shown above, growth has
been steady in recent years, underpinned by chronic repairs
backlogs across the state schools, higher and further education
sectors. Over the medium term, we anticipate that the recession
may result in a slowdown in growth rates in investment levels in
RMI, but overall demand will be sustained by the need for
essential reactive and cyclical RMI, while planned maintenance
programmes may be a necessary alternative to newbuild where costs
need to be tightly controlled.
Within the public sector, schools constitute the
largest area of activity, estimated to be worth around £1.3 –1.4
billion a year, equivalent to around a third of all public sector
construction RMI output. In addition, independent schools,
universities and further education colleges combined account for
an estimated £1 billion at contractors output levels. The largest
sector is that of state schools with a combined estate of around
100million sq m. in the UK. Primary schools and secondary schools
account for most RMI work undertaken, with special schools,
nurseries and pupil referral units being niche markets.
Independent schools account for approximately
10% of education RMI expenditure. Over the last 5 years, RMI
expenditure has grown steadily, underpinned by the need to keep
buildings in peak condition to attract new pupils. Over the medium
term, however, the recession may impact on this as there has been
an increase in school closures in 2009, while indications are that
overall pupil numbers may fall this winter.
RMI work in the higher education sector – mostly
comprising the 100+ universities- is estimated at over £500m and
accounts for over 20% of education RMI output. The total estate
size is approximately a quarter the size of the public sector
schools estate, but Universities include a wide range of student
accommodation, research, sports and leisure facilities. The
further education sector educates over 3 million students at over
400 institutions, though RMI expenditure levels are much lower due
to more limited facilities.
In terms of RMI provision, the market is highly
fragmented and localised due to the wide range of services
provided under the RMI heading. In the state schools sector,
however, at newer schools (re)built under long-term DBFO
contracts, RMI services are typically provided under 25+ year
concessions by large facilities management companies, while other
sectors adopt a wide range of service provision arrangements.
