Education RMI Market - UK 2009-2013
AMA Research, September 2009, Pages: 71
The 1st edition of the Education RMI Market – UK 2009-2013 focuses on key market trends, structure and change within the primary, secondary, further and higher education sectors, major education RMI contractors and procurement issues.
Underpinned by a chronic backlog of repairs in education sector buildings, the market – currently valued at around £2.4 billion - is expected to show steady growth over the long term as local authorities, schools and governing bodies increase investment in RMI works on buildings not earmarked for replacement or major refurbishment.
Key areas in the report:
- Procurement of education RMI work by local authorities from capital budgets, by schools from revenue budgets and by independent schools, universities and FE colleges.
- Appraisal of state schools sector in each of the 4 home countries – by school type, by estate size, by country and regions - analysis of schools condition, repairs backlog and RMI expenditure.
- Assessment of independent schools market for RMI – types of school, regional mix and trends in capital expenditure
- Evaluation of higher and further education RMI markets – condition of buildings, repairs backlog, trends in student numbers, value of RMI output
- National and large regional contractors – including dedicated RMI services companies and FM contractors.
Areas of particular interest:
- Unique review valuing the RMI sector.
- Valuation of education RMI work – trends and forecasts.
- Shift in responsibility for RMI works procurement for maintained schools from local authorities to school governors.
- UK education RMI market mixes by types of establishment and country.
- Detailed analysis of RMI investment levels in state schools sector.
- Identification of leading contractors.
Some of the companies included:
Apollo Education, Balfour Beatty WorkPlace (BBW), BAM FM, Carillion Group, City Building (Glasgow) LLP, Connaught Group Plc, Crispin & Borst, Cruden Property Services, Dalkia Technical Services, Enterprise Facilities Services, Ian Williams Group, Interserve Facilities Services, Kier Support Services, MITIE Property Management, Mountjoy, ROK Group, TH Kenyon Plc, Willmott Dixon Sustain.
Key areas covered in the report include:
OVERVIEW OF EDUCATION RMI MARKET
- Size of education RMI market by contractors output – 2003/04 –2008/09 with forecasts to 2012/2013.
- Non-housing public sector RMI output by work types – M & E services, roofing, glazing etc.
- Overview of market trends.
- Market mix by types of establishment by contractors output.
PUBLIC SECTOR SCHOOLS
- Structure of the state education system in England, Scotland, Wales and Northern Ireland including types of schools in operation. Size of the schools estates – total and for each of the 4 home countries. Country & regional breakdowns by school type by number of establishments.
- Schools market for RMI works by revenue expenditure for each of the 4 home countries. Trends for England 2003 - 2008.
- Key markets factors for RMI – trends in total education expenditure in each of the 4 home countries; government capital expenditure trends in schools sector; condition of schools estates & repairs backlog by country; local authority capital & revenue expenditure on education RMI.
- Identification of types of RMI works by procurement route i.e. local authority capital budgets and schools revenue budgets. Overview of typical RMI expenditure levels by types of school and identification of key areas of spending. Key areas of RMI spending. Comparison of average RMI costs for different types of school.
HIGHER EDUCATION
- Structure and size of higher education sector in the UK – size of estate in terms of total, student accommodation, teaching & research facilities 2000 – 2006. Breakdown by age & condition of buildings.
- Analysis of student accommodation by types of premises, assessment of growth trends.
- RMI contractors output 2000 –2008. Analysis of key market drivers including RMI backlog & estate condition, growth in student numbers and trends in government and other funding.
FURTHER EDUCATION
- Structure and size of further education sector in the UK – size of estate and breakdown by age of buildings, number of institutions.
- Capital and revenue expenditure on RMI work.
- Assessment of market drivers - analysis of RMI backlog and condition of estate.
INDEPENDENT SCHOOLS
- Overview of structure of UK independent schools sector, includes breakdown by type of school by numbers e.g. public, preparatory, faith, Montessori etc. Breakdown by country and English regions.
- Trends in capital expenditure 2004 –2008 - total capex, RMI, also newbuild & refurbishment and other including ICT.
CONTRACTOR PROFILES
- Identification of leading national and regional contractors offering RMI services to the education sector.
- Contractor profiles – key contractors operating in the education market –including ROK, Integral, Ian Williams, Kier Support Services, Carillion Property Services, Connaught Group, Enterprise Facilities Services, Willmott Dixon Sustain, Crispin & Borst etc.
1. INTRODUCTION
1.2 SOURCES
2. EXECUTIVE SUMMARY AND FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.1 GDP
3.2 INFLATION & INTEREST RATES
3.3 UNEMPLOYMENT
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.6 STERLING
3.7 POPULATION PROFILE
3.8 CONCLUSIONS
4. EDUCATION RMI MARKET
4.1 DEFINITION
4.2 OVERVIEW OF NON-DOMESTIC RMI OUTPUT
4.3 EDUCATION RMI MARKET
4.3.1 Market Size
4.3.2 Market Mix by Establishment Types
5. LOCAL AUTHORITY MAINTAINED & OTHER NON-INDEPENDENT SCHOOLS
5.1 DEFINITION
5.1.1 Schools in England & Wales
5.2 PUBLIC SECTOR SCHOOLS ESTATE
5.2.1 Overview
5.2.2 England
5.2.3 Devolved Administrations
5.3 MARKET FACTORS
5.3.1 Total Education Expenditure
5.3.2 Governments Capital Expenditure in the Schools Sectors
5.3.3 Condition of Schools Estates & Maintenance Backlog
5.3.4 Local Authorities Capital & Schools Revenue Expenditure on Repairs Maintenance
6. INDEPENDENT SCHOOLS
6.1 INTRODUCTION
6.2 INDEPENDENT SCHOOLS ESTATE
6.3 CAPITAL EXPENDITURE
7. HIGHER EDUCATION
7.1 INTRODUCTION
7.2 HIGHER EDUCATION ESTATE
7.3 MARKET FACTORS
7.3.1 Higher Education Funding
7.3.2 Student Numbers
7.3.3 Condition & Infrastructure Backlog
7.3.4 Capital & Revenue Expenditure in the Higher Education Sector
8. FURTHER EDUCATION
8.1 INTRODUCTION
8.2 FURTHER EDUCATION ESTATE
8.3 MARKET FACTORS
8.3.1 Further Education Funding
8.3.2 Condition & Infrastructure Backlog
8.3.3 Capital & Revenue Expenditure
9. CONTRACTOR PROFILES
9.1 INTRODUCTION
9.2 LEADING NATIONAL CONTRACTORS
9.3 MAJOR RMI CONTRACTORS TO THE EDUCATION SECTOR
STATISTICS
CHART 1: EDUCATION RMI MARKET £ MILLION 2003/04 –2011/12
CHART 2: INTEREST RATES AND INFLATION (CPI) FROM 1992-2013
CHART 3: PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2013
TABLE 4: EXCHANGE RATE FLUCTUATIONS 2002-2009 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES
CHART 5: AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 2001 CENSUS (‘000)
TABLE 6: CONTRACTORS OUTPUT OF NON HOUSING NEW WORK & RMI 2003 -2008 (£M)
TABLE 7: NON-RESIDENTIAL RMI OUTPUT BY WORK TYPES – GENERAL FABRIC, ELECTRICAL, PLUMBING, JOINERY, ROOFING, GLAZING, DECORATING, ETC - PUBLIC AND COMMERCIAL SECTOR SPLIT – 2007 (£M)
TABLE 8: EDUCATION RMI MARKET £ MILLION 2003/04 –2011/12
CHART 9: EDUCATION NEWBUILD AND R & M TRENDS 2003 -2008 BY VALUE
CHART 10: EDUCATION RMI MARKET BY TYPES OF ESTABLISHMENT BY EXPENDITURE APPROXIMATE SHARES 2008
TABLE 11: UK PUBLIC SECTOR SCHOOLS BY TYPE & NUMBER 2008
TABLE 12: ENGLAND- NUMBER OF SCHOOLS BY REGION AT APRIL 2008
TABLE 13: ENGLAND - NUMBER OF SCHOOLS & GROSS INTERNAL FLOOR AREA 2008 (M2).
TABLE 14: SCOTLAND - NUMBER OF SCHOOLS BY LEA AT APRIL 2008
TABLE 15: SCOTLAND - NUMBER OF SCHOOLS & GROSS INTERNAL FLOOR AREA 2008(M2).
TABLE 16: WALES - NUMBER OF STATE SCHOOLS BY LEA AT JANUARY 2009
TABLE 17: WALES - NUMBER OF SCHOOLS & GROSS INTERNAL FLOOR AREA BY TYPE 2008 (M2).
TABLE 18:NORTHERN IRELAND - NUMBER OF STATE SCHOOLS MARCH 2009
TABLE 19: NORTHERN IRELAND - NUMBER OF SCHOOLS & GROSS INTERNAL FLOOR AREA BY TYPE (M2)
CHART 20: UK TOTAL EDUCATION EXPENDITURE 2004-2011 (£ BILLION)
TABLE 21: DCSF SPENDING 2007/08 – 2011/11 MIX BY RESOURCES & CAPITAL (£ BILLION)
CHART 22: SCHOOL BUILDINGS CAPITAL EXPENDITURE 2007-2011 (£ BILLION)
TABLE 23: DCSF CAPITAL FUNDING STREAMS - ALLOCATION FOR SCHOOLS 2008-09 TO 2010-11 (£M)
TABLE 24: ENGLAND– CONDITION OF SCHOOLS ESTATE, PERMANENT BUILDINGS
TABLE 25: SCOTLAND – CONDITION OF SCHOOLS ESTATE 2008 40
TABLE 26: DCFS DE MINIMIS CAPITAL EXPENDITURE LEVELS ON SCHOOLS R & M WORKS – PRIMARY & SECONDARY SCHOOLS BY AREA 41
TABLE 27: SCHOOLS MAIN TYPES OF R & M WORKS & ORGANISATIONS RESPONSIBLE FOR FUNDING AND DELIVERY 42
TABLE 28: TYPICAL ANNUAL REVENUE & MAINTENANCE EXPENDITURE LEVELS BY SCHOOL TYPE 43
TABLE 29: ENGLISH LEAS - BUILDING MAINTENANCE & IMPROVEMENT REVENUE EXPENDITURE (E12) 2003-04 TO 2007-08 44
TABLE 30: ENGLISH LEAS - DCSF SPENDING BY SCHOOLS ON R&M (GROSSED UP DATA) £M 2003/04 –2006/07 45
TABLE 31: UK INDEPENDENT SCHOOLS & HEADCOUNT BY NO. ESTABLISHMENTS BY REGION 2008 47
TABLE 32: UK INDEPENDENT SCHOOLS BY NUMBER BY TYPE 2008 48
TABLE 33: UK INDEPENDENT SCHOOLS COUNCIL MEMBERS CAPITAL EXPENDITURE – NEW BUILD AND RMI 2004-08 (£M) 49
TABLE 34: UK HE TOTAL ESTATE SIZE MILLION SQ M 2001/02 –2007/08 51
CHART 35: TYPES OF STUDENT ACCOMMODATION IN THE UK – APPROXIMATE SHARE BY SECTOR 2008 52
TABLE 36: HE FUNDING BODIES BY REGION – TOTAL BUDGET AND CAPITAL BUDGETS 2009-10 55
CHART 37: HEFCE GRANTS BY FUNDING STREAM 2009/10 56
TABLE 38: NO. STUDENTS IN HIGHER EDUCATION UK 2000-2010 57
TABLE 39: AGE & CONDITION OF UK HIGHER EDUCATION ESTATE 2006 59
TABLE 40: HIGHER EDUCATION SECTOR - TOTAL REVENUE AND R & M COSTS 2001-2008 (£M) 60
TABLE 41: SIZE OF UK FE ESTATE BY AGE OF BUILDINGS (% MIX – SQ.M) 63
TABLE 42: CONDITION OF FE COLLEGE BUILDINGS IN ENGLAND 2006 64
While there is some information on the level of new build activity within the education market, the level of RMI (Repairs, Maintenance and Improvement) activity has always been difficult to quantify due to the fragmented way budgets are managed and controlled.
However, AMA Research have recently published a unique review assessing the Education RMI market in terms of overall spend, sector splits, spend programmes, levels of responsibility etc.
The total market for building related RMI works in the non-residential sector is estimated at around £16 billion at contractors output levels. Of this, public sector works account for around £4.5 - 5 billion and private sector work for over £11 billion. Education RMI work cuts across both public and private sectors and is currently estimated to be worth around £2.4 billion – a major sector in overall RMI work. As shown above, growth has been steady in recent years, underpinned by chronic repairs backlogs across the state schools, higher and further education sectors. Over the medium term, we anticipate that the recession may result in a slowdown in growth rates in investment levels in RMI, but overall demand will be sustained by the need for essential reactive and cyclical RMI, while planned maintenance programmes may be a necessary alternative to newbuild where costs need to be tightly controlled.
Within the public sector, schools constitute the largest area of activity, estimated to be worth around £1.3 –1.4 billion a year, equivalent to around a third of all public sector construction RMI output. In addition, independent schools, universities and further education colleges combined account for an estimated £1 billion at contractors output levels. The largest sector is that of state schools with a combined estate of around 100million sq m. in the UK. Primary schools and secondary schools account for most RMI work undertaken, with special schools, nurseries and pupil referral units being niche markets.
Independent schools account for approximately 10% of education RMI expenditure. Over the last 5 years, RMI expenditure has grown steadily, underpinned by the need to keep buildings in peak condition to attract new pupils. Over the medium term, however, the recession may impact on this as there has been an increase in school closures in 2009, while indications are that overall pupil numbers may fall this winter.
RMI work in the higher education sector – mostly comprising the 100+ universities- is estimated at over £500m and accounts for over 20% of education RMI output. The total estate size is approximately a quarter the size of the public sector schools estate, but Universities include a wide range of student accommodation, research, sports and leisure facilities. The further education sector educates over 3 million students at over 400 institutions, though RMI expenditure levels are much lower due to more limited facilities.
In terms of RMI provision, the market is highly fragmented and localised due to the wide range of services provided under the RMI heading. In the state schools sector, however, at newer schools (re)built under long-term DBFO contracts, RMI services are typically provided under 25+ year concessions by large facilities management companies, while other sectors adopt a wide range of service provision arrangements.
- Apollo Education
- Balfour Beatty WorkPlace (BBW)
- BAM FM
- Carillion Group
- City Building (Glasgow) LLP
- Connaught Group Plc
- Crispin & Borst
- Cruden Property Services
- Dalkia Technical Services
- Enterprise Facilities Services
- Ian Williams Group
- Interserve Facilities Services
- Kier Support Services
- MITIE Property Management
- Mountjoy
- ROK Group
- TH Kenyon Plc
- Willmott Dixon Sustain
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