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UK Bundled FM Outsourcing Market within the Healthcare
and Education Sectors at Current Prices 2007 – 201 3
The Facilities Management market has shown good growth since the
early 1990’s, influenced by the desire to control operational
efficiencies and costs, and a trend within the private sector for
companies to refocus their business in order to concentrate on
core competencies. Further growth since the turn of the
millennium was influenced by the buoyant state of the economy and
public sector developments. 2009 saw the market decline as the
economy overall experienced a period of recession. This has
contributed to an overall market value for outsourced ‘bundled’
services and TFM of over £14 billion in 2010.
This
report is specifically focussed upon healthcare and education application
sectors, representing some of the most dynamic end use sectors for
outsourced FM services over the last decade. The market for outsourced
‘bundled’ services within healthcare and education is valued at more than
£3 billion in 2010, with the development of this market between 2007 and
2012 illustrated in the chart above.
The UK
economy appears to have stabilised and is forecast to start seeing some
growth from 2011 continuing in the short to medium term. While the
downturn in the economy had a negative impact on the growth of the
overall FM market, the Healthcare and Education sector received a boost
initially as the Government’s decision to bring forward £3bn of capital
spending to 2009-10 from 2010-11 to provide some impetus to the economy
saw increased investment in these sectors. However, following the
general election in 2010 and the formation of the coalition government,
policies have changed and budgets have been cut, along with a number of
capital expenditure programmes, resulting in more moderate growth in the
sector in the medium to longer term even though the overall economy is
expected to recover in that period.
The
penetration of FM outsourcing within the healthcare sector is estimated
at around 40-50%, with outsourcing generally higher for ‘soft’ services.
The healthcare sector is largely approaching maturity, with limited
potential for growth particularly in the acute hospital sector, although
there remain some opportunities in the primary care sector. In contrast,
the education sector is less mature with outsourcing accounting for
around 20-25% of overall FM provision by value, leaving more potential
for growth. Historically outsourcing has often taken the form of single
service contracts within education, although TFM provision increased,
with a boost from the BSF programme. However, the cancellation of BSF
means this growth in bundling and TFM is likely to slow.
The FM
market has experienced an unprecedented number of mergers and
acquisitions, as well as number of business failures and market
withdrawals. The level of acquisitions has been largely influenced by
the poor performance within the economy overall but also by market
maturity, as well as by the increasing array of services being outsourced
leading to larger companies seeking to ‘buy in’ specialist knowledge.
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