i-FM B-Corp

10 more years in FM on i-FM: 2010 - 2020

This news review covers our second decade: 2010 – 2020. You can catch up on the history of the marketplace over our first 10 years here. Looking back over the second 10 years, one might say that nothing changes – in the sense that companies continue to come and go, contracts have been won and lost, people have changed jobs, market dynamics have shifted. And yet at the same time, it is a much different world – yes, we see many of the same issues and challenges; but the pace of change has increased, technology is an ever more present factor, and new trends around security, health, wellbeing and more have come to the fore. At i-FM, a central part of our role is to keep track of all this for the benefit of our readers and the industry as a whole. Please remember that if you want to pursue any of the topics covered in this article you can search our vast archives on any keyword or named topic.

Early in the year a research report concluded with just the sort of thing that the holders of long-term FM contracts (amongst others) like to hear. PricewaterhouseCoopers had found clear evidence that new facilities provided via the Building Schools for the Future programme actually work as measured in terms of raising pupil aspirations and improving behaviour. Over eight out of 10 head teachers surveyed said they believed BSF was transforming learning in schools.

But it was not all praise for the government. An Institute of Directors report concluded that the public sector was routinely ‘squandering’ money on procurement and outsourcing. Poorly structured and inefficient procedures could be replaced with something better that could save at least £25bn, the IoD said.

At a local government level the scale of the challenge being laid out before decision-makers was highlighted in research backed by Interserve, which found that the vast majority of them viewed targeted total efficiency savings of £5.5bn as ‘optimistic’. They all knew their central government allocation was due to be cut, and they were looking hard for ways to reduce costs. Outsourcing was cited as one good option.

News like that may have contributed to the views captured by Grant Thornton in a survey of private equity investors. The general opinion was that the support services sector was a good place for investment, with the amount of money going in by the end of Q1 2010 already equal to the total value recorded in the whole of 2009. The report concluded that investors were again feeling ‘very comfortable’ about putting their money into firms that demonstrate robust contracts and repeat business.

More research later in the spring, this time from international group Frost & Sullivan, concluding that the prospect of increased cost savings was driving the growth of the integrated facilities management market. Take-up of this approach varied from sector to sector and country to country across Europe, F&S said, but even where implementation was comparatively low clients all identified the main appeal as the promise of further cost savings. The firm put the value of the European integrated FM market at £9.9bn in 2008 and estimated it would reach £14.5bn in 2015.

By the summer, the schools marketplace was looking like a less good investment area. After much speculation about the possibility, new Education Secretary Michael Gove declared the Building Schools for the Future programme dead. Gove described BSF as ‘inflexible and needlessly complex’. So complex, indeed, that the list of projects to be stopped and those sufficiently underway to be allowed to proceed proved almost immediately to be plagued by errors.

By autumn the new coalition government was sharpening its focus on costs. Cabinet Office Minister Francis Maude was making the case to major suppliers, including some big support services groups, that a new centralised approach to procurement would be more efficient both in terms of cost and the time required for decision-making. This followed an earlier meeting with contractors in which Maude outlined plans to renegotiate payment terms.

Later in the year Local Government Secretary Eric Pickles called on local authorities to put fresh emphasis on more sharing of services and more outsourcing in order to deliver savings. He said that new opportunities needed to be looked at from chief executive level right down to the provision of back office services. Then, in the private sector, the Carbon Trust said its figures indicated that undervaluing the returns from investment in energy efficiency was leading big businesses to waste at least £1.6bn every year. Most of that could be saved through measures including upgrades to heating and lighting, energy-saving policies and staff training, it said. A large part of what’s needed is simply empowering someone at the centre of the business to take on the challenge – and who better than the FM?


That reference to energy efficiency was an indicator that the whole area was becoming a key market interest for a number of service providers. Early in the new year Balfour Beatty acquired energy procurement and carbon strategy consultancy Power Efficiency, merging it into the Balfour Beatty WorkPlace business. The company said that clients were increasingly looking for advice and help on reducing energy costs and carbon footprints, making in-depth skills in those areas an essential part of the offer.

Spring brought another indicator of growing market interest with the news that property advisor Cushman & Wakefield had taken full control of Corporate Occupier Solutions, the joint venture FM provider previously operated with EC Harris. C&W said the change was in line with its strategy to expand and align its facilities management services globally.

Mid-year saw the publication of new research commissioned by the Business Services Association, concluding that Britain's outsourcing industry was approaching in size the financial services sector, generating more than £200bn a year. According to the report by Oxford Economics, the industry accounted for 8% of the UK’s total economic output. It was also the second largest employer, behind retailing, accounting for 3.1m jobs, equivalent to 10% of the British workforce. The figures included IT and data services, which made up the largest proportion of the outsourcing industry covered in the report. That fact was often overlooked as the FM industry warmly embraced this general indicator of its importance.

Late in the year Servest Multi Service Group confirmed that it had acquired Turners Cleaning and Support Services. The move, part of Servest’s declared strategy to become one of the top five multi-service providers in the UK, produced a business with a combined turnover of £70m. The ambitious Servest was targeting a turnover of £300m over the coming three years, it said.


This, of course, was the year of the London Olympics. In the first of what would prove to be a long series of grave warnings, BT reported on research showing that almost three-quarters of British businesses saw an opportunity to prosper from the 2012 Games, but nearly a third had made no preparations to ensure they could remain open and fully functional during the period. Problems including transport chaos, supply chain disruption and plummeting productivity were all being anticipated (though very little of this seemed to materialise in the end).

The opening of the year also saw G4S, official security services provider to the 2012 Olympic and Paralympic Games, launching what it called the 'biggest paid recruitment drive this century'. The company said it would recruit around 10,000 security staff to work at the Games over the summer. All very positive and encouraging – though it would end badly.

Soon after, a new report from business consultants Grant Thornton showed that in 2011 the number of mergers and acquisitions involving the UK facilities management sector reached the highest count since 2008 and the onset of the credit crunch. The firm was predicting that deal numbers would remain high as some companies pursued scale while others sought new service lines.

And almost on cue it was revealed that Reliance FM was to be merged into Norland’s Managed Services division, creating an enlarged FM business with a turnover of more than £100m. The full company, somewhat confusingly also named Norland Managed Services, would now employ about 2500 staff across 11 offices producing a total turnover of more than £300m.

Perhaps on the back of Olympics enthusiasm, no doubt coupled with continuing efforts to recover from the earlier recession, business opportunities seemed to be growing rapidly in the public sector. The Financial Times reported that its analysis of the market landscape was pointing towards 'the biggest wave of outsourcing since the 1980s'. The FT noted that more than £4bn worth of tenders would be negotiated this year, with three government departments – the Ministry of Justice, Ministry of Defence and Department for Work and Pensions – being the biggest sources of contracts. But there would also be, it said, a rise in activity in local government, transport and education.

Later, many industry watchers were surprised to see one of the pioneering private sector outsourcing vehicles in FM brought to an end as it emerged that BT was to take the service delivery company Monteray in-house. Monteray, established in 2000 specifically as a BT support company, was a joint venture between Carillion, Haden (Balfour Beatty) and Reliance. BT refused to discuss the plan, saying only that the new BT Facilities Services Ltd would be operating as a wholly owned subsidiary, probably by the end of the year.

Returning to a theme that cropped up regularly throughout the year, outsourcing in the public sector, the CBI offered its view that engaging with private sector suppliers could save public sector organisations as much as £22.6bn. The group’s Open Access report argued that urgent action was needed from the government to deliver the Open Public Services strategy, specifically in terms of finding new ways to deliver essential services at lower costs. Across the range of services considered, it was suggested that outsourcing FM in healthcare areas could produce £517m in average cost efficiencies.

Not everyone was convinced, however. The Local Government Association described the estimated savings figures in the CBI report as 'pie in the sky'. From the point of view of local councils in particular, an LGA spokesman said: “The CBI calculation assumes that cost is the only criteria councils have to consider, and rickety methodology means fresh savings are being claimed for services which have already been outsourced. This is an important debate and we need to base it in reality,” he added.

Towards the end of the year, a report published by the Royal Institution of Chartered Surveyors hit one of the ‘hot button’ topics in FM with the conclusion that facilities management was not as strategic as it should be. Research showed that the average Head of Facilities spends less than one day a week dedicated to planning and strategy, RICS said. The view emerging from the study was that FM can and should be seen as a strategic business and management discipline – but there was a gap between perception and current practice.


January saw the introduction of a theme that would run throughout the year (if not far longer). Chris Cracknell, then Chief Executive of OCS Group and Chair of the sector skills agency Asset Skills, issued a challenge to facilities management membership bodies to do a better job of promoting and developing the industry. “We will be missing a trick if we do not come together to ensure lobbying, support, skills and research add real benefit to employers,” he said, calling on the representative bodies to rationalise their number and increase their effectiveness.

By the spring, Asset Skills, the industry body for facilities management and cleaning, announced that it had reached agreement in principle to explore the benefits of a merger with the Cleaning and Support Services Association.

A month later the British Institute of Facilities Management and the Facilities Management Association announced that they would be joining Asset Skills and CSSA in the discussions about forming a single FM body. As the facilities management and support services profession and industry have matured and evolved, so too must the bodies representing and leading them, said the BIFM. A steering group was established to progress the proposed merger.

Meanwhile, the commercial world had news of what looked like it might become a theme across the local government sector: Amey had won a £150m FM contract covering services for the Tri-borough project, a consolidation of functions and activities being pulled together by Westminster City Council, the Royal Borough of Kensington and Chelsea and the London Borough of Hammersmith & Fulham. The ten-year FM deal was expected to save each over £2m a year through operational efficiencies.

Then late in the summer the BIFM confirmed that it had withdrawn from merger discussions with Asset Skills, CSSA and the FMA. Commenting on the change of direction, CEO Gareth Tancred said: “The board’s first priority is to ensure decisions such as these are in the best interest of members. Right now, it has been decided that we must focus on the delivery of our strategy and continuing our current success.”

And returning to the commercial world, Carillion announced that it was to restructure its energy business, scaling back operations as two key programmes failed to take off. Mixed signals on both programmes by a government apparently no longer sure about its pledge to be ‘the greenest ever’ were affecting revenue expectations, Carillion conceded.

In the autumn, CBRE announced that it had struck a deal to acquire the hard services-led FM provider Norland for £250m, with another £50m contingent on performance. CBRE said the buy would add market-leading capabilities to self-perform building engineering services to its existing UK and European corporate services business.

And finally, on that merger story, the board of Asset Skills voted in favour of the proposed merger with the Facilities Management Association and the Cleaning and Support Services Association, clearing the way for the change to proceed. Asset Skills Chief Executive Sarah Bentley said: “This means that we can forge ahead with our exciting plans. The merger is just the start of a vision for the future of representation in the industry, and consolidation will not end with these three organisations.”


And we didn’t have to wait long for the next chapter in this story. In March the new alliance revealed its new identity - The Building Futures Group. BFG said it was the only representative organisation for the housing, property, planning, cleaning, parking and facilities management sectors (perhaps not surprising, that) – adding that its new name reflected the organisation’s commitment to developing individuals working within those industries, as well as safeguarding the buildings where people live, work and play, now and for the future.

More change in the commercial landscape, this time with the news that Interserve had entered into an agreement to acquire Initial Facilities from Rentokil Initial for £250m in cash. The deal included Initial’s operations in the UK, Ireland and Spain. Interserve said the transaction would create an organisation of increased scale, underpinning future business performance and growth and offering an attractive proposition for customers, partners and employees of both companies.

Late July saw the opening of a rapid-fire saga that looked for a while as though it might see the bringing together of two giants in the construction and services world – Carillion and Balfour Beatty. But almost as quickly as it burst on the scene, it all went sour and it looked at the time as though the idea was not just dead but bitterly so. The rebalanced Carillion had approached the troubled Balfour Beatty for friendly talks; news of that leaked out before either was prepared; advisers were marshalled; talks continued; offers were made; issues arose; more offers were made; rebuffs grew blunter; and time (and no doubt patience) ran out.


In early market news, ISS UK&I confirmed the acquisition of the UK, Ireland and European technical services division of GSH Group, putting to bed rumours that had been swirling through the industry for months. ISS said the buy would create a significantly enhanced delivery capability, comprising over 1800 technicians across the region. It added that it would be continuing to drive towards a more integrated self-delivery solution. The deal put an enterprise value of £53m on GSH.

Later, reports began to emerge that CBRE was in talks to acquire the Johnson Controls Global Workplace Solutions business. Reuters, for example, reported that CBRE’s initial expression of interest had won out over others, including several private equity firms. JCI had announced late in 2014 its intention to sell GWS, and it was now looking like the price would be around £1bn.

Picking up on another growing theme in facilities management, the World Green Building Council announced the launch of a global campaign on health, wellbeing and productivity. John Alker of the UKGBC said: “Green buildings must not only meet our planetary needs, but also the needs of people and business. That’s why health, wellbeing and productivity in the property sector is such a key topic – it’s essential for making the business case for green buildings. But it’s now time to go from awareness-raising to action, and driving real change on the ground.”

Then as summer came to a close CBRE confirmed that it had completed the buy of Johnson Controls' Global Workplace Solutions business. The $1.475bn deal was described as “a very exciting step” by CBRE President and CEO Bob Sulentic. The business would be merged with CBRE’s occupier outsourcing business line, and the new combined operation would adopt the Global Workplace Solutions name, Sulentic said.


The start of another year brought news of the not wholly surprising collapse of the Building Futures Group. It turned out that one apparent key party, the CSSA, had never quite finalised its part of the merger when it declared that it was quitting the group. In any case, BFG had never seemed to find sufficient purpose to ensure a long life.

Another big change in the status quo saw Royal Mail confirm that it was preparing to bring Romec, its facilities and maintenance operations service provider, in-house after running it as a joint venture business for nearly 15 years. The external stake was then held by Balfour Beatty, with the ownership moving again to Cofely (now ENGIE) with its acquisition of the Balfour Beatty Workplace business in 2013. It seemed ENGIE wasn’t interested in that particular part of the investment.

Later, in a joint venture that did prove to have long-term ‘legs’, Servest and the French group Atalian revealed that they were launching a 50/50 jv business, operating as Atalian Servest Ltd, to offer integrated FM services to both existing and new customers across national boundaries. Commenting on the motivation for the deal, Rob Legge, Servest Group CEO UK and Europe, said: “The world is becoming a smaller place and we have seen that businesses are now looking for unified solutions that bring their communities together. We wanted to offer our customers a pan-European solution with a partner that operates with the same cultural and business philosophies as adopted by Servest in the UK.”

In other business news, property services group JLL confirmed that it was to buy property maintenance provider Integral. JLL said the acquisition would strengthen its ability to self-perform maintenance services for clients across the EMEA region, as well as add an engineering centre of excellence in the UK. The deal valued Integral at about £230m. 

Insights into a different kind of market change followed with the release of a trading update from Mitie that warned of ‘significantly’ lower operating profit for the current year than previously forecast. The company said it was feeling the effects of economic pressures, specifically lower UK growth rates, changes to labour legislation, further public sector budget constraints and uncertainty both pre and post the EU referendum (which took place in June 2016). 

Later, Mitie was back in the news with the announcement that after 10 years as Chief Executive, Ruby McGregor-Smith was to leave the company at the end of the year. The process of finding her replacement had started late last year when she made her plans known to Mitie’s board and was already complete, the group said. Phil Bentley, ex-Group CEO at Cable and Wireless Communications, was set to take the top job.

Soon after, another senior departure was announced – this time it was Interserve CEO Adrian Ringrose saying he would be leaving the group once a successor was in place, a move expected to be completed in 2017. Ringrose said he was planning to pursue the next phase of his career after 15 years with Interserve.

Then Mitie was back in the headlines again, this time with even more bad news. Publishing its interim report, it revealed that for the six months to 30 September 2016 group revenue was down 2.6%, operating profit was down 39% - and the loss for the period topped £100m. The company blamed the problems on, amongst other things, changing market conditions as clients adjusted to rising labour costs and economic uncertainty. It also declared its intention to exit the home healthcare business as quickly as possible.


By mid-January, Mitie was warning its investors on profit performance following a two-day board-level strategy and trading review. In a market update, the group said that its property management and technical FM divisions had been impacted by client deferrals and investment plan delays. In addition, it noted that the cleaning division was underperforming. At the same time, a balance sheet review - with “a more conservative judgement on contractual positions” - had identified an additional £14m of one-off charges in the year. All this emerged as new CEO Phil Bentley completed his first month on the job.

Meanwhile, uncertainty around Brexit was becoming one of several themes forming a backdrop to everything happening in the UK economy, not least the FM sector. A report from the Chartered Institute of Personal and Development noted that while the short-term outlook for employment remained strong, labour and skills shortages were starting to bite in UK sectors that employ a high number of EU nationals - including cleaning and food services.

As the first quarter of the year moved towards a close, Interserve reported that it was grappling with the disappointing performance of its UK construction business and the high cost of exiting the energy from waste business. That left total revenue for the year largely unchanged over the previous period, though with both operating profit and pre-tax profit notably down. Performance in UK support services helped to offset the weakness at UK construction, however, and the company said the outlook for 2017 remained positive.

March also featured the news that the landmark Tri-borough deal, which brought together three London councils in a 10-year partnership to share services procurement and delivery, had collapsed. That seemed to be largely attributable to political differences between the two (both Conservative) and the third (which went Labour in 2014). Though many of the key council services were involved, Amey's 10-year facilities management contract with the three was unaffected as it was a separate deal.

The arrival of spring saw the publication of the first two international standards in facilities (or facility) management. The team behind the standards development said they were significant because they established a consensus view of FM as a coherent, consistent discipline that is business-critical. The initial publications were ISO 41011:2017 Facility Management – vocabulary and ISO 41012:2017 Facility Management - Guidance on strategic sourcing and the development of agreements. Later, ISO 41001 Management System – Requirements was the subject of a consultation process as a part of its development.

May saw more tough news from Mitie, this time of a £50m write-down and jobs being cut. Surprisingly, investors took the group's latest trading update reasonably well and the share price crept up following the announcement. CEO Phil Bentley said: "FY17 has undoubtedly been a challenging year but Mitie remains a strong and successful business, and is continuing to deliver for our customers.” Investors seemed to agree that the steps being taken were moving the group in the right direction. 

Then, Mitie returned with full-year figures. Following what it confirmed was “a challenging year”, the group had revised its past figures downwards and unveiled a hard-hitting efficiency programme, coupled with a new business strategy and a deal of positivism. Given the restated figures, turnover was effectively flat; but the real hit was in a £43m reported operating loss for the year – a reversal on 2016 of almost 140%. That loss included one-off items of over £88m, part of the outcome of the group’s accounting review.

On another worrying note, a first-half trading update saw Carillion reporting trouble, mainly on its construction side. Deterioration in cash flows on some construction contracts led the company to launch a review of all contracts. The result was a provision of £845m across both UK and overseas markets. Chairman Philip Green said: “We are also announcing that we are undertaking a thorough review of the business and the capital structure, and the options available to optimise value for the benefit of shareholders.”

Summer saw more reason for concern about business confidence, at least at the large company end of the market, as Interserve reported on its first six months. This saw revenue up modestly in the face of "challenging market conditions and an uncertain political environment", but operating profit was down significantly. Within the support services segment, the UK-based business delivered stable H1 revenue, though profitability was down.

Later, Carillion was back in the headlines with the news that five top executives were leaving as the group continued to work on its turnaround strategy. As a part of the change it was bringing in a new Chief Financial Officer, a new Chief Operating Officer and a new Chief Transformation Officer.

In a different sort of business news, Cordant Group, the UK's second largest recruitment and services business, revealed that it was changing its structure and strategy in order to become the country’s largest social enterprise. Working on a five-year plan, the group said it would reinvest the majority of its profits into social programmes across education, employment and healthcare, pledging to touch and improve thousands of lives.

Later still, Carillion broke news that must be pretty close to record-breaking, at least in our sector. First-half pre-tax losses had soared to over £1bn - £1.153bn to be precise. The group had already warned that it was making substantial provisions on construction contracts, and it had since added a further £200m to that arising in the support services division. Interim Chief Executive Keith Cochrane labelled the situation “disappointing”.

Then, news came that Carillion had struck an agreement to sell "a large part" of its healthcare facilities management operations to Serco for £50m. That was the first significant step in a plan to sell non-core assets with a total value of £300m by the end of 2018, the Carillion said.

Finally, Interserve released a trading update showing a continued slowdown in business coupled with rising costs. In the UK support services operation the causes were employment cost pressures, the cost of contract mobilisations, margin deterioration driven by a cost base which had not been flexible enough and contract performance in the justice business, the company said.


The dawn of a new year brought comparatively positive news from Interserve. In a new trading update it said that 2017’s performance looked like being in line with expectations and 2018 looked like being ahead of expectations. CEO Debbie White said: “The new management team, and the board, have been working to stabilise the business and provide a sound foundation to continue to serve our customers effectively, underpin our future growth and to restore shareholder value.” 

But the real big news followed shortly thereafter – Carillion in compulsory liquidation. Along with the declaration of that monumental step, chairman Philip Green said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future. In recent days, however, we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.” And that was just the start of the story.

By way of one illustration of the fall-out, the Ministry of Justice moved to create a new facilities management company - dubbed Gov Facility Services Limited - to take over the delivery of the prison FM services previously provided by Carillion, including cleaning, reactive maintenance, landscaping and planned building repair work. Around 1,000 staff, including 100 contractors, who were previously employed by Carillion, moved across to the new business with their terms and conditions of employment preserved.

Elsewhere, the British Institute of Facilities Management marked its 25th anniversary with the publication of a 'manifesto for change' that involved a refocusing of its strategy, a new name and pursuit of chartered status. The institute said it was proposing to add ‘workplace’ to its name because it embraces a wider range of key functions than facilities management, recognising the joint responsibility of FM, IT and human resources to achieving optimal performance between people, technology and workplace. The proposed changes were due to be voted on at a July AGM.

Meanwhile over at another recovering company – Mitie – the news was largely positive,  with revenue for the closing fiscal year expected to be up comfortably. The only downside was the cost of the transformation itself – running about £10m ahead of where it was expected to be.

Later, Carillion’s demise set off, amongst other things, a series of investigations into how it happened and what should be learned from it. One of the first groups to publish its views was the TUC. Their report offered a harsh (though not entirely negative) position on outsourcing generally and then went on to make a series of recommendations around protecting the public interest, ensuring transparency and clarifying directors’ duties.

In more positive news - a big M&A deal, with the acquisition of Servest by the French facilities services group Atalian. The deal put a value on the former of £540m and brought to an end – almost – Servest’s active acquisition strategy: it emerged that the UK company was at the same time in the process of buying two specialist businesses, growth that was OK’d to continue.

Within another ongoing theme, Cabinet Office Minister David Lidington unveiled a package of new measures designed to promote "a healthy and diverse marketplace" of companies bidding for government contracts. He said that the UK needed to build a diverse, vibrant marketplace of different suppliers and announced plans to extend the requirements of the Social Value Act in central government to ensure all major procurements explicitly evaluate social value where appropriate, rather than just ‘consider’ it.

Later, in much anticipated new-business news, the Crown Commercial Service launched the Facilities Management Marketplace agreement, designed to give the public sector access to a wide range of suppliers for their FM requirements. A total of 47 companies were awarded places across three value-banded lots. The winning bidders included 10 small and medium-sized enterprises, bringing diversity and competition into the market for public sector contracts, CCS said. The full value of expenditure was estimated at £12bn over four years.

First-half figures released mid-summer by Interserve showed that revenue was down and the profit line was £6m in the red. But the company said that aligned with management expectations and its recovery plan was on track. In fact, headline operating profit was over £40m, significantly improved over H2 2017.

November saw the new Institute of Workplace and Facilities Management, formerly the BIFM, hold its initial event. Introducing the IWFM brand, chairman Stephen Roots said: “We are entering an exciting new era as a modern professional body that is fit for the twenty-first century.” In conjunction with that, the institute laid out a ten-point programme of activity for the coming months.

Also, news slipped out elsewhere that BT had struck a deal with ISS and CBRE to outsource its FM, reversing a 2012 decision to bring the purpose-designed facilities services company Monteray in-house. The five-year contract was due to start in April 2019.


The new year opened with a report from business and financial adviser Grant Thornton concluding that 36% of all local councils in England were at risk of financial failure in the next ten years. The firm said that many would hit crisis point even earlier, with almost one in five councils set to be at risk of financial failure by 2021. London boroughs were found to be most exposed with 78% forecast to be at risk of financial failure over the next decade. Unitary authorities and metropolitan councils were the two next most vulnerable authority types, with 49% and 50% expected to hit financial failure by 2028 respectively.

Against that added bit of background calling into question the stability of some parts of the FM market (to take a parochial view), the TUC launched an argument for higher standards of transparency, accountability and value for taxpayers wherever public services were put out to tender. The union group called for improved data collection on outsourced contracts, a ‘Domesday Book’ to record all contracts and their performance, and major reforms to improve value for taxpayers from outsourcing.

Then came much-anticipated full-year results for 2018 from Interserve, along with new details of its deleveraging plan. The figures showed group revenue down 10.7%. The loss on the year proved to be a considerable improvement on 2017’s loss of £244m; and operating profit showed a significant gain, climbing by 9.7%.

But within a few weeks Interserve shareholders had voted the deleveraging plan down. The board’s back-up was administration and a pre-pack sale, designed to be implemented and completed straightaway. And indeed over the space of a weekend the PLC was replaced with a newly incorporated company ultimately controlled by the group's existing lenders, leaving the existing PLC shareholders with nothing. Going forward, it was – the new Interserve said – “business as usual for employees, customers, suppliers and other stakeholders”.

Kier was then in the news, with a trading update that warned of bad things to come in its 2019 financial year report. Given performance across the group, it said that it was expecting full-year revenue to be broadly in line with 2018 figures, but with operating profit lower than previous expectations. There were concerns about debt levels, too, and about costs associated with its future-proofing programme. Kier added later that it planned to cut back to its core focus and divest in four areas, including facilities management.

Better news came from Wates as the construction and engineering group launched a new Wates FM brand with expanded nationwide capabilities. Wates FM managing director James Gregg commented: “The launch of Wates FM is a positive step that will support the adaption of our FM services to the needs of an evolving market.”

Over in ‘sister industry’ corporate real estate we were seeing increasing talk of flex space. According to property services firm JLL, there was a revolution going on in the commercial property world, with more variation in occupation solution offers piling up over the past three years than in the previous 30. In a new report, the firm predicted that over the next five years more than 10m sq ft would be added to the stock in key UK cities, and flex space would account for over 8.5% of the total office stock by 2023.

CBRE rounded out the year with the publication of its annual ‘Top Trends in Facilities Management’ report. This identified a shift in occupier priorities, from cutting costs to finding a service provider who can add value through innovation, sustainability and diversity initiatives and priorities. This in turn, the report said, leads to relationships between occupiers, FM providers and their supply chains becoming longer lasting and more sustainable – with longer-term contracts increasingly focused on helping occupiers to attract and retain talent and showcase their brand both internally and externally. The report went on to argue that a focus on people would continue to drive the occupier agenda, impacting what is demanded from facilities managers.


There was some good news at the beginning of the year, in particular for companies interested in providing outsourcing services to the public sector. Research indicated that UK public procurement had climbed by 17% in 2019 – representing more than 45,000 contracts placed, with a total value of about £93bn. The biggest customer was central government, accounting for 43% of the deals awarded, with local government falling in behind at 25%. The NHS and housing associations made up the bulk of the rest. In terms of activity area, construction accounted for the largest share of the award spend at £22bn. FM and waste came in at £9bn worth of deals signed that year.

Later, the green theme was back in the news with a report claiming that companies were spending something like £60m on wasted energy. The Green Alliance think-tank said that its research showed the scale of waste was largest in the City of London, where offices were giving up £35m a year. Better use of digital technology is one obvious solution, the report noted: for example, artificial intelligence energy optimisation systems already on the market could cut energy use by as much as 14% in commercial buildings with pay-back in just a few months.

At almost exactly the same time, business advisor PwC reported that their 23rd annual CEO Survey found that top executives around the world were increasingly worried about climate change.  Almost two-thirds of UK CEOs said they believed that climate change was a threat to their organisation, with a quarter being extremely concerned about the issue. That second figure represents a tripling of the datapoint from 2016 levels, when only 7% said they were extremely concerned.

Elsewhere in the UK worry was growing about proposed new immigration policies. The British Cleaning Council warned the "huge" possible impact of government proposals for a new, restrictive immigration system from 2021. The BCC, echoing concerns that had been expressed occasionally following the 2016 Brexit referendum, said it feared plans to restrict visas for lower-skilled, lower-paid overseas workers would cause serious labour shortages in the sector, which is one of the largest industries in the UK, worth £49.9bn and employing 914,000 people.

This all happened in the first couple of months of the year – important issues, but soon to be largely overshadowed by the pandemic, which at that point we had no idea was coming with such force. i-FM reported its first coronavirus-related story at the end of February, when an international services group flagged up the possibility of some impact on its performance. As it became evident that the facilities sector was going to be both a ‘victim’ of the pandemic and a critical player in supporting organisations of all kinds to cope with it and its aftermath, we introduced a Covid-19 topic into our search structure. Content has never accumulated so fast under any other topic heading.

At the time of writing (June 2020) it is clear that Covid-19 has, effectively, changed everything – for the country, the industry and individuals. How long that change lasts and what forms it takes remain to be seen. If there is a silver lining to this for FM, it lies in the fact that the industry and its people are more recognised for their value and contributions than perhaps ever before.

Pandemic or not, though, FM is a marketplace that continually generates news. In one particularly notable event, Macro reported that it was rebranding as Mace, taking the parent group name as part of an ongoing restructure that sees the FM division becoming the focus for Mace’s ‘operate’ services.

And in the biggest news the sector has seen for some time, Mitie announced that it had signed a deal to buy Interserve Support Services. When the Interserve group was restructured post-administration a common view was that it had been prepared for break-up and sale – this now seemed to be the case. Mitie said it would be paying a combination of cash - £271m – and shares amounting to a holding of almost a quarter of the group. For that, Mitie would become by far the largest FM company in the UK.

And that brings us to June 2020, mid-way through a remarkable, difficult and immensely uncertain year. The next 10 months, let alone the next 10 years, are going to be interesting indeed. The fact, as stated at the conclusion of our first decade review, remains as true as ever: FM is never dull.