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More competition in the delivery of public-sector FM services could save millions of pounds, according to a detailed industry study. The Confederation of British Industry (CBI) report on public services reform examined the potential for cost savings in 20 service areas, by opening delivery up to independent providers. The Open Access report revealed that up to £517 million could be saved if all remaining in-house hospital FM services were opened up to more competition. The NHS spends £7.3 billion per year on hard and soft FM services, with 71 per cent provided in house. Cleaning costs the NHS around £1.1 billion per year, while catering costs £700 million, and security £120 million. The report concluded that there was significant scope to open up the £2 billion-a-year school FM market to new providers. Currenty, 69 per cent of school FM is undertaken by the public sector and savings of £209 million could be achieved if services were subject to full competiton from a diverse range of providers. Evidence suggested that savings of 5 per cent per meal are common when opening up school catering to more competition. The research of a cross section of services, carried out by Oxford Economics, found an average 11 per cent of gross potential savings from productivity improvements could be achieved, equivalent to £2 billion, with a 06 | 4 OCTOBER 2012 | FM WORLD
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total of £22.6 billion saved. The report said: “Independent providers already play an important role in managing and improving public services. But the scale of openness is uneven, with many services still largely monopolised by the public sector and opportunities for independent provision limited.” The report focuses on meeting the challenge of large public spending cuts necessary by the
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CBI pushes for more access to public sector services The CBI is keen to address public service spending
end of 2016/17, as well as the increasing pressure that changing demographics will put on services. CBI director-general John Cridland said that “carrying
on regardless would be a recipe for disaster. Most public services are still largely state monopolised and it’s time to open some of them to competition.”
Experts urge ‘cultural fit’ with FM suppliers The increasing importance of the buyer-supplier relationship when contracting FM services was discussed last week in a webinar event hosted jointly by FM World and Supply Management, the magazine of the Chartered Institute of Purchasing & Supply. During the event, sponsored by Interserve, a panel of procurement experts highlighted the growing importance of aligning the values of both buyer and supplier, and that buyers must find suppliers with similar cultural values – as well as the right cost and quality of product or service – to get the most out of an FM contract. Nick Caton, regional category lead, environment and FM EMEA at AstraZeneca, is leading from a procurement angle as part of a cross-functional team on a
project to transform the way the global pharmaceutical firm manages its FM. The company aims to have 90 per cent of its FM services carried out by contractors. Caton said that with so much responsibility handed over to third parties, evolving the buyer/ supplier relationship was key. AstraZeneca has held a number of supplier engagement events where it presented problems to potential suppliers and asked them to help develop solutions. Caton explained that this more collaborative approach was intended to foster an “emotional contract” to accompany the factual one. The internal team at the company then take on a role of governance and oversight, rather than managing the operations itself.
When asked how buyers should go about including ‘cultural fit’ in the contracting process, panellist Tony Sanders, managing director – commercial at Interserve, commented: “We’ve found the most successful fit is at the preferred bidder stage, where there are a couple of providers and you can work quite heavily on workshops and developing a solution in a much more collaborative way. That way, you can see much more how each of you works,” he said. To watch the full sixty-minute webinar, ‘How to add value to FM procurement’, readers can register and watch via the following links: REGISTER tinyurl.com/FMW-Web01Reg WATCH tinyurl.com/FMW-Web01Watch www.fm-world.co.uk
27/09/2012 17:13