05 February 2017 | Martin Read
Martin Read explains how the FM industry can move forward following the collapse of Carillion.
Perhaps when the national media finally woke up to this thing called facilities management it was always going to reach for the sensational. And sure enough, Carillion's woes have led to calls for little short of a revolution in public sector service provision.
Bring everything back in-house or leave the market to its devices? The truth lies somewhere in the middle, as it invariably does. And while the political 'middle' has something of a presentation problem just now, sustainable business models rarely exist on the margins.
No one with a reasonable grasp of our industrial history would advocate a return to the dogma of wholly insourced public sector services, just as no one would expect outsourced service providers to be the answer to every situation or allowed to operate free from the consequences of failure.
What Carillion shows is that service providers of any size can make catastrophically poor decisions. If there is anything good to come out of the disaster it's a raised awareness of the outsourced sector's wafer-thin margins and a fresh debate about the 'intelligent client' - with the government itself shown as a far-from-shining example of what good procurement should be.
Procuring essentially on price alone is to rely on one spectacularly inefficient criterion, and an engaged government client would surely know when one of its preferred contractors had taken on a damaging level of risk by bidding too low.
It's a great pity that, just as Carillion's liquidation was dominating the headlines, the Crown Commercial Service was introducing a framework to dramatically increase the number of SMEs to whom it gives government FM service work. This initiative's positive intent should not be drowned out.
Also, those scapegoating the FM service sector should study its recent history. Entire conferences have discussed the pursuit of synergies, innovation, strategy - with providers striving to make their relationships with clients work and introduce standards for FM services procurement.
As we went to press, the Ministry of Justice announced the formation of a government-owned FM provider to take on Carillion's prison work - one of several stories likely to keep Carillion in the headlines in the weeks ahead. The sector should make the most of its place in the public spotlight.
Martin Read is editor of FM World