01 April 2019 | Herpreet Kaur Grewal
Since the collapse of Carillion, and with Interserve having gone into administration before getting new ownership, outsourced facilities management has had to continue defending itself in the glare of a national spotlight.
The near-term future appears uncertain: MTW Research's recent report claims that the market for outsourced FM services is facing the lowest level of growth since 2012 - a result of continuing business uncertainty and pressure on client budgets.
So how is the sector responding? EY's recent report talked of FM service firms facing stagnating profitability in part because of increased competition from SMEs.
The government is also encouraging SME providers to step up - for example, through its SME Action Plan, which is designed to help smaller mid-market firm bid for contracts.
In 2018, the Cabinet Office-based Crown Commercial Service (CCS) also launched the Facilities Management Marketplace agreement. It aims to give the public sector access to a wide range of suppliers for their FM requirements and some hailed it as a significant change for smaller bidders vying for contracts.
Oliver Dowden, Parliamentary Secretary at the Cabinet Office, has said that in a post-Carillion world it is vital to strengthen the supply chain. One of the ways in which he said the government is doing this is through increased diversity, "particularly by enabling small and medium-sized enterprises to bid and win government contracts".
Given their concerns about risk exposure, are more large clients likely to consider putting their eggs in multiple baskets by employing more single-service or smaller local multi-service providers? Could the outsourcing landscape be changing to favour more medium and smaller-sized players?
This month we asked if you think the market is changing to favour smaller providers? Here are your responses.
Of those asked, more than 66 per cent of you agreed the market was changing to favour smaller players, while 11 per cent thought it was not and 22 per cent said it was not clear yet.
Nine respondents have explained to us what they think is happening. (The links to their pieces appear above.)
Chris Kenneally, CEO, Cordant Group
Andrew Porter, managing director of Spingate Consulting
Paul Skelton, business development director, Active Workplace Solutions
Julian Fris, director, Neller Davies
Stephen Gathergood, head of engineering, Vinci Facilities
James Bradley, director at Churchill
Mike Boxall, managing director of Sitemark
Ashley Kirk, AM Services Group commercial director
Phil Roker, owner/managing director, Vacherin