Growth in the market for healthcare RMI is primarily underpinned
by investment in buildings and M & E maintenance by NHS Trusts in
England, which account for around 60% of RMI output. NHS Trusts
from the other three countries account for around 15% of demand,
while independent hospitals and private nursing homes also have
significant RMI budgets.
AMA have published a unique review of the Healthcare RMI market
which provides a detailed assessment of refurbishment, maintenance
and improvement activities across the healthcare sector in the UK
– including both public and private sector activities.
We
estimate that for the financial year ending March 2009, the
healthcare RMI market was worth over £1.2 billion, approximately
4% of the non-residential buildings RMI market and around a third
of the size of the healthcare newbuild market.
RMI activity has grown steadily in all sectors in recent years as
both public and private sector organisations sek to reduce the
maintenance backlog and improve the quality of their estates. The
key driver across NHS estates in UK has been chronic building
maintenance backlogs. In England, this is currently valued at
around £4 billion and at around £450 million each in both Wales
and Scotland. The burden of the backlog is mostly being borne by
the acute hospitals, the largest of the various sub-sectors by
type of organisation.
In
a wider context, total ‘support services’ expenditure costs for
NHS England alone were over £6 billion in 2008-09, which includes
all estates services, FM provision, ‘hotel’ services etc. Building
maintenance and engineering services account for around 12% of the
combined estates and hotel services costs – equivalent to around
£740m - and cover a comprehensive range of activities - building
fabric, sanitaryware, drainage, plant and materials etc. Acute
hospitals are the key cost area accounting for around 70% of
expenditure.
The private healthcare sector is also reviewed in the report and
includes independent hospitals and private nursing homes. While
RMI activity is difficult to estimate because of the fragmented
nature of the independent sector, AMA estimated the sector
accounts for over 25% of demand for RMI services.
From 2011, growth in investment among the NHS Trusts is expected
to slow down following the next Comprehensive Spending Review, but
essential RMI works are likely to be both unavoidable and
unacceptable to the public. It is possible that, as capital
budgets come under increasing pressure, there will be a shift away
from newbuild towards increased levels of planned maintenance,
which are currently low.
In
terms of supply, the market is polarised between independent,
local building maintenance and M & E services contractors –
servicing smaller NHS Trusts and independent hospitals – and
large, national FM contractors, typically providing ‘hard FM’
services under long-term PFI/PPP concessions.
