Facilities Management

This report looks at the changes that have occurred over the last two years and in particular at the growth in the trend towards outsourcing. There has been a fundamental shift in the approach to many business relationships, which has facilitated the ability to work in partnership rather than in the traditional adversarial supplier client relationship. This better working relationship has allowed facilities management to flourish.

The prevailing political climate supports the modernisation of government through strategic service partnerships and the building and running of public infrastructure through PFI deals. Facilities management is at the heart of many of these deals and this has been fundamental in driving awareness and recognition of the profession. In many ways the public sector has been an early adopter of a more progressive approach to the outsourcing of facilities management.

The scope of the industry is very broad and continues to expand so this report examines the main segments of the market and highlights the major influences occurring within each. The facilities management market has become increasingly complex as enterprises have more readily defined the difference between core and non-core business services.

The rapid growth of the industry has brought both strengths and weaknesses which, now it has achieved a higher profile, are even more vital to its future development. These factors are examined with a view to determining the likely future prospects for the market.

• Definitions
  
• Abbreviations

Summary of Key Report Findings

• An expanding market
  
• Despite broadening support, services remain biggest sector
  
• IT expanding the scope of facilities management
  
• Room for all in a diverse market
  
• Benchmarking and standards measurement
  
• Training, qualifications, professionalism
  
• Increased industry recognition at board level
  
• Strategic FM - the new way
  
• Partners not adversaries
  
• Regulation and legal issues
  
• PFI means significant growth in public sector
  
• Broadening of services
  
• TFM - not possible?

Legislation and Industry Issues

• Best value
  
• PPP
  
• PFI
  
• Housing Act
  
• Environmental issues
  
• Benchmarking - an EU standard
  
• TUPE

Market Size and Trends

• Figure 1: The UK facilities management market, 1998-2003

Market Segmentation

• Figure 2: Value of business services, by sector, 2000-03
  
• Figure 3: UK business services turnover, by sub-sector, 2000-03

Service Sector Overview

• Figure 4: Support services provided by catering contractors, by number, 2002
  
• Figure 5: Support services provided by catering contractors, by number, 1997-2002
  
• Figure 6: Number of meals served by contract caterers, per market segment, 1997-2003
  
• Telecommunications
  
• Telebusiness
  
• Figure 7: Breakdown of call centre market, by industry user, 2002
  
• Building operations and maintenance
  
• Transport
  
• Figure 8: Comparison of fleet, business and private new car registrations, 1998-2002
  
• Infrastructure management
  
• Environment management
  
• Figure 9: Attitudes towards pollution in the UK, 1997 and 2001
  
• Waste management
  
• Figure 10: Breakdown of estimated total annual waste, 1999 and 2001
  
• Energy management
  
• Figure 11: Carbon dioxide emissions, by end-user, 1990 and 2000
  
• Figure 12: Energy use, by sector, 1997-2001
  
• Figure 13: Energy use, by sector, 1990-2001
  
• Property management
  
• Management consultancy
  
• Figure 14: UK management consultancy fee income, by sector and service, 1999-2001
  
• Information technology

Client Sector Overview

• Business and industry
  
• Central Government
  
• Education
  
• Health
  
• Local government
  
• MOD

The Supply Structure

• Total Facilities Management
  
• Interservefm Ltd
  
• Figure 15: Interservefm financial performance, 2000-02
  
• Jarvis plc
  
• Figure 16: Jarvis plc financial performance, 2000-02
  
• MITIE Group plc
  
• Figure 17: MITIE Group plc financial performance, 2000-02
  
• Serco
  
• Figure 18: Serco financial performance, 2000-02
  
• Construction
  
• Amey plc
  
• Figure 19: Amey plc financial performance, 2000-02
  
• Carillion plc
  
• Figure 20: Carillion financial performance, 2000-02
  
• Mowlem Aqumen
  
• Figure 21: Mowlem Aqumen financial performance, 1999-2001
  
• Taylor Woodrow FM
  
• Figure 22: Taylor Woodrow plc, financial performance, 2000-02
  
• Engineering
  
• AMEC plc
  
• Figure 23: AMEC plc and AMEC Facilities Ltd, business lines by turnover, 2000-02
  
• Figure 24: AMEC financial performance, 2000-02
  
• EMCOR Drake & Scull Ltd
  
• Figure 25: EMCOR UK financial performance, 2000 and 2001
  
• WS Atkins
  
• Figure 26: WS Atkins financial performance, 2000-02
  
• Single-service providers
  
• Capita Group
  
• Figure 27: Capita financial performance, 2000-02
  
• Chestertons Workplace Management
  
• Figure 28: Chestertons financial performance, 2000-02
  
• Haden Building Management Ltd (Balfour Beatty plc)
  
• Figure 29: Balfour Beatty plc, financial performance, 2000-02
  
• ISS - International Service Systems
  
• Figure 30: ISS financial performance, 2000-02
  
• L S Trillium (Land Securities Ltd)
  
• Figure 31: Land Securities plc financial performance, 2000-02
  
• Rentokil Initial Group
  
• Figure 32: Contribution to Rentokil Initial turnover, by division, 2002
  
• Figure 33: Contribution to Rentokil Initial turnover, by region, 2002
  
• Figure 34: Rentokil Initial financial performance, 2000-02
  
• Sodexho Alliance
  
• Figure 35: Sodexho revenue breakdown, by region, 2002
  
• Figure 36: Sodexho financial performance, 2000-02

Inherent Industry Weaknesses

• Problems of definition
  
• Benchmarking
  
• Training and professionalism
  
• Poor perception still to be overcome
  
• Incoherent image
  
• Reflected bad press from PFI
  
• Poor relationships
  
• TFM not always best option
  
• Recession risk or reward?

Opportunities and Strengths

• IT offers a new cohesive opportunity
  
• Strategic approach
  
• Longer and larger contracts
  
• Political support
  
• Flexibility

The Future

• More consolidation delivering more TFM
  
• More strategic roles
  
• Greater professionalism
  
• Benchmark likely to be established
  
• Beacon PFI projects
  
• IT development towards more integrated approach

Forecast

• Stable growth to continue as market matures
  
• Figure 37: Forecast of the UK market for facilities management, 2003-07
  
• PFI proves valuable
  
• IT an increasingly profitable area
  
• Consolidation a future feature
  
• Factors incorporated

Appendix: Research methodology


Index of reports