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Facilities Services Provision - Social Housing Market Report - UK 2012-2016 Analysis
AMA Research, August 2012, Pages: 94
AMA Research are pleased to announce the publication of the second edition of the report ‘Facilities Services Provision - Social Housing Market Report - UK 2012-2016 Analysis'.
The report reviews the outsourced service provision of non-core services with a specific focus on the Local Authority (LA) and Housing Association (HA) owned social houses respectively.
Key areas covered by the report include:
Specific analysis of facilities services within each social housing sector – extent of outsourcing, types of contracts placed, activities typically bundled, sector interest and potential future opportunities in outsourcing.
Analysis of expenditure – breakdown of current and capital expenditure and analysis of management and maintenance costs in each sector.
Review of the leading providers – company profiles for the leading contractors of facilities services within the social housing sector.
Overview of the social housing sector - size, recent trends and key market influences, forecasts and future prospects.
Housing Associations now own over 50% of social housing properties, shifting the market structure away from Local Authorities. The pressures to achieve ‘best value for money' are impacting on facilities services provision within the social housing sector. Also the supply chain has undergone substantial changes in recent years following the demise of Connaught Partnerships and other providers, leading to social housing landlords looking for less risk, greater stability and control over operations.
The vast majority of LAs and HAs retain the overall management of the housing stocks but sub-contract at least some of the work to external contractors. The placement of contracts for facilities services in the social sector has changed in recent years; individual contracts continue to be the main type of contract placed and whilst ‘bundled' contracts are placed, there appears to be a shift towards the placement of smaller ‘bundled' packages as well as multiple contractors.
The report contains a detailed assessment of the market, together with market trends and influences, as well as an analysis of future prospects and potential opportunities.
Areas of particular interest:
Analysis of facilities service provision and a breakdown of the types of contracts placed with respect to the properties owned by the LAs and HAs.
Changes in the contracts placed that offer less risk.
Impact of the near completion of the Decent Homes Programme and future potential opportunities in the market from the Green Deal and other initiatives.
Key areas covered in the report include:
SOCIAL HOUSING FACILITIES SERVICES PROVISION
Facilities provision market size and trends, mix by service type, prospects to 2016.
Key market influences – current and capital expenditure programmes, construction output and developments, Government budget cuts, impact of the administration of key companies and near completion of Decent Homes programme.
Outsourcing of FS – services outsourced, move towards smaller bundled contracts.
Facilities provision market size and trends, mix by service type, prospects to 2016 in each sector (LA and HA).
Specific analysis of facilities services provision within the Local Authority owned/managed social housing sector – extent of facilities services outsourcing, expenditure, types of contracts placed, activities typically bundled, sector interest and potential opportunities for facilities services outsourcing.
Specific analysis of facilities services provision within the Housing association owned/managed social housing sector – extent of facilities services outsourcing, expenditure, types of contracts placed, activities typically bundled, sector interest and potential opportunities in facilities services outsourcing.
SOCIAL HOUSING SECTOR
Market size from 2006-2011, with forecasts to 2016, including key market influences.
Analysis of social housing stocks by ownership – shift in ownership with Housing Associations owning more than half of the properties.
Breakdown of the social housing market by country.
THE FACILITIES MANAGEMENT OUTSOURCING MARKET
Overview of the overall Local Government Facilities Management outsourcing market - estimates of total market size from 2006-2011, with forecasts for the period to 2016.
Key market influences and future prospects – macro-economic factors, increasing maturity in a number of end use sectors, trend towards ‘bundling' and legislative influences.
Overall market mix by end use sector amongst Central Government, Local Government and Social Housing sectors.
Key trends – exit of some key players, impacts on the market structure, behaviour of the buyers etc, with available opportunities being seized by some new entrants in to the market.
Identification of key FM providers to social housing sector - includes company structure, areas of specialisation, turnover, etc.
1.2 SOURCES OF INFORMATION
2. SUMMARY AND FUTURE PROSPECTS
2.1 EXECUTIVE SUMMARY
2.2 FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.2 INFLATION & INTEREST RATES
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.7 POPULATION PROFILE
4. FACILITIES SERVICES OUTSOURCING MARKET
4.1 DEFINITION OF FACILITIES SERVICES
4.2 FACILITIES MANAGEMENT OUTSOURCING SECTORS
4.3 CENTRAL & LOCAL GOVERNMENT FM OUTSOURCING MARKET
4.4 FACILITIES SERVICES PROVISION IN THE SOCIAL HOUSING SECTOR
4.4.1 Definition of Facilities Services
4.4.2 Facilities Services Provision in Social Housing Sector
4.5 KEY MARKET INFLUENCES ON THE SOCIAL HOUSING FM SECTOR
4.5.1 Motivation for Outsourcing
4.5.2 Impact of the Administration of Key Companies in the Sector
4.5.3 Decent Homes Standard
4.5.4 Impact of the ‘Green Deal'
4.5.5 Social Housing Construction
5. FACILITIES SERVICES PROVISION IN THE LOCAL AUTHORITY HOUSING SECTOR
5.1 MARKET SIZE
5.2 ARMS LENGTH MANAGEMENT ORGANISATIONS
5.3 FACILITIES SERVICES PROVISION
5.3.1 Local Authority Housing Maintenance & Improvement Market Size
5.3.2 Type of Contracts Out-sourced by Local Authorities
5.3.3 Types of Work Activities Bundled in LA Contracts
5.3.4 Expenditure on Work Activities in LA housing
5.3.5 Interest in Out-sourcing Facilities Services - LA
5.3.6 Future Prospects in Out-sourcing Facilities Management in LA Sector
5.4 PROCUREMENT OF GOODS & SERVICES
6. FACILITIES SERVICES PROVISION IN THE HOUSING ASSOCIATION HOUSING SECTOR
6.1 MARKET SIZE HOUSING ASSOCIATION MAINTENANCE AND IMPROVEMENT
6.2 TYPE OF CONTRACTS OUT-SOURCED BY HOUSING ASSOCIATIONS
6.3 TYPES OF WORK ACTIVITIES BUNDLED IN HA CONTRACTS
6.4 EXPENDITURE ON WORK ACTIVITIES IN HA HOUSING
6.5 INTEREST IN OUT-SOURCING FACILITIES SERVICES - HA
6.6 FUTURE PROSPECTS IN OUT-SOURCING FACILITIES MANAGEMENT IN HA SECTOR
7. SOCIAL HOUSING SECTOR, EXPENDITURE & STOCK
7.1 SOCIAL HOUSING MARKET DEFINITION
7.2 UK SOCIAL HOUSING MARKET DWELLINGS
7.3 SOCIAL HOUSING MARKET BY COUNTRY
7.4 SOCIAL HOUSING MARKET BY OWNERSHIP
7.5 LOCAL AUTHORITIES – EXPENDITURE & STOCK
7.5.1 Expenditure on Housing
7.5.2 Expenditure on Housing by Country
7.5.3 Costs for Management and Maintenance in Local Authority Housing
7.5.4 Housing Stocks Owned by Local Authorities
7.6 HOUSING ASSOCIATIONS
7.6.1 Public Sector Funding
7.6.2 Private Sector Funding
7.6.3 Operating and Maintenance Costs of Housing Association Properties
7.6.4 Housing Stocks Managed by Housing Associations
8. FACILITIES SERVICES CONTRACTORS REVIEW
8.2 COMPANY PROFILES
TABLE 1: FACILITIES SERVICES PROVISION IN SOCIAL HOUSING MARKET 2006-2011, LOCAL AUTHORITIES, HOUSING ASSOCIATIONS BY VALUE (£M)
CHART 2: INTEREST RATES AND INFLATION (CPI) FROM 1992-2016
CHART 3: PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2016
TABLE 4: EXCHANGE RATE FLUCTUATIONS 2008-2014 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES
CHART 5: AGE DISTRIBUTION OF THE RESIDENT UK POPULATION MID-2010 (‘000)
CHART 6: UK FM SERVICES MARKET SHARE BY VALUE - CORPORATE, HEALTH/EDUCATION AND GOVERNMENT 2011
TABLE 7: UK CENTRAL & LOCAL GOVERNMENT FM MARKET 2006-2016 (CURRENT PRICES)
CHART 8: % MIX OF FM END USER MARKET BY VALUE 2011 – HOUSING, LOCAL GOVT, CENTRAL GOVT.
TABLE 9: FACILITIES SERVICES PROVISION IN SOCIAL HOUSING MARKET 2006-2016, BY VALUE LAS & HAS (£M)
TABLE 10: CURRENT & CAPITAL EXPENDITURE MIX OF FACILITIES SERVICES PROVISION IN SOCIAL HOUSING MARKET 2006-2011, BY VALUE (%)
TABLE 11: NUMBERS OF NON-DECENT LOCAL AUTHORITY DWELLINGS IN ENGLAND (X1000) - 2001/11
TABLE 12: ENGLAND – LOCAL AUTHORITY FORECAST OF DWELLINGS TO BE MADE DECENT 2011-15
CHART 13: UK SOCIAL HOUSING COMPLETIONS 2003-2011
CHART 14: FACILITIES SERVICES PROVISION IN LOCAL AUTHORITY SECTOR, BY VALUE – 2006-2016
CHART 15: MIX OF ORGANISATIONS MANAGING THE LOCAL AUTHORITIES’ HOUSING STOCK – ALMOS VS LAS 2011
TABLE 16: OVERALL EXPENDITURE ON LOCAL AUTHORITY PROPERTIES – MANAGEMENT, CURRENT & CAPITAL VALUE ESTIMATES 2011 £M.
CHART 17: EXPENDITURE ON FACILITIES SERVICES BY TYPE OF CONTRACT PLACED IN LA HOUSING – BUNDLED, TFS, OTHER 2011
CHART 18: PERCENTAGE OF BUNDLING BY WORK ACTIVITY – PLANNED, VOIDS, REACTIVE, IMPROVEMENTS (%)
CHART 19: MIX OF WORK ACTIVITIES TO LOCAL AUTHORITY HOUSING 2010/11 BY VALUE - PLANNED, VOIDS, RESPONSIVE, IMPROVEMENTS
CHART 20: ESTIMATED TOTAL EXPENDITURE ON LA HOUSING, 2011 -2016
CHART 21: ESTIMATED CHANGE IN RATIO OF THE TYPES OF LA CONTRACT PLACEMENT BY EXPENDITURE, TFS, BUNDLED, OTHER 2011 -2016
CHART 22: FACILITIES SERVICES PROVISION IN HOUSING ASSOCIATIONS, BY VALUE – 2006-2016
TABLE 23: EXPENDITURE ON HOUSING ASSOCIATION PROPERTIES £M VALUE ESTIMATES - MANAGEMENT, PLANNED, ROUTINE, MAJOR REPAIRS 2009-11
CHART 24: EXPENDITURE ON FACILITIES SERVICES BY TYPE OF CONTRACT PLACED IN HA HOUSING – TFS, BUNDLED, OTHER 2011
CHART 25: PERCENTAGE OF BUNDLING BY WORK ACTIVITY IN HA HOUSING – PLANNED, VOIDS, REACTIVE ETC (%)
CHART 26: MIX OF TYPES OF CONTRACTS PLACED FOR FACILITIES SERVICES PROVISION TO HA PROPERTIES - RESPONSIVE, PLANNED ETC 2010/11 BY VALUE
CHART 27: ESTIMATED TOTAL EXPENDITURE ON HA HOUSING: 2011 -2016
CHART 28: ESTIMATED CHANGE IN RATIO OF THE TYPES OF CONTRACT PLACEMENT BY EXPENDITURE, HA 2011 -2016
CHART 29: UK SOCIAL HOUSING MARKET – TOTAL DWELLING STOCK M 2006-2016
CHART 30: UK SOCIAL HOUSING MARKET BY COUNTRY - 2010
CHART 31: UK SOCIAL HOUSING DWELLING STOCK BY OWNERSHIP, LA, HA 2002-2011
TABLE 32: UK EXPENDITURE ON LOCAL AUTHORITY HOUSING AND COMMUNITY AMENITIES – CURRENT, CAPITAL 2006/2012 - £M
CHART 33: EXPENDITURE ON LA HOUSING AND COMMUNITY AMENITIES BY UK DEVOLVED ADMINISTRATION – 2011/12
TABLE 34: AVERAGE OPERATING & MAINTENANCE COSTS PER LOCAL AUTHORITY PROPERTY - MANAGEMENT, ROUTINE, MAJOR 2010/11
TABLE 35: SOCIAL HOUSING STOCK NUMBERS OWNED BY LARGEST LOCAL AUTHORITIES
TABLE 36: SOCIAL HOUSING STOCK NUMBERS MANAGED BY MAJOR ARMS LENGTH MANAGEMENT ORGANISATIONS
TABLE 37: SUMMARY OF HCA FUNDING ALLOCATIONS & ACTIVITY: ENGLAND 2011-2015 – AFFORDABLE HOUSING PROGRAMME / DECENT HOMES
TABLE 38: AVERAGE OPERATING AND MAINTENANCE COSTS FOR A HOUSING ASSOCIATION PROPERTY – MANAGEMENT, PLANNED, MAJOR 2010/11
CHART 39: HOUSING ASSOCIATION EXPENDITURE ON MAINTENANCE AND MAJOR REPAIRS OF ITS PROPERTIES MARCH 2004-2011 (£ M)
TABLE 40: HOUSING ASSOCIATION GROUPS IN ENGLAND BY STOCK OWNED
CHART 41: MIX OF TYPES OF HOUSING ASSOCIATION, 2006-2011
CHART 42: UK MARKET SHARES IN FACILITIES SERVICES PROVISION IN SOCIAL HOUSING SECTOR BY VALUE 2011
The social housing sector is arguably one of the least mature in terms of FS outsourcing. Facilities services outsourcing in the social housing sector grew year on year to 2008, influenced by the buoyant state of the economy, as well as the public sector developments funded. However, the market has declined in recent years, primarily due to the economic downturn and Government spending cuts. In 2011 it is estimated that the FS outsourcing market in the social sector was worth around £8.4bn excluding management costs.
The changing structure of the social housing market and pressures to achieve ‘best value for money' is impacting on the facilities services provision within the social housing sector. A wide range of approaches are currently being adopted by the Local Authorities (LAs) and Housing Associations (HAs).
The facilities services provision market in the social housing sector has changed significantly in recent years as Connaught and Rok went into administration in 2010, with others following such as Kinetics Group. Social housing providers are now looking for less risk, greater stability and control over operations. There appears to have been a shift in the types of contracts placed, with smaller bundled packages being placed and often involving more than one contractor.
The vast majority of LAs and HAs retain the overall management of the housing stocks but sub-contract out at least some of the work to external contractors. ‘Bundled' contracts (the delivery of multiple services under a single contract) account for around a third of the housing expenditure in both the Local Authorities and Housing Associations sectors. Total facilities service contracts remain a very small proportion of contracts placed, with individual & in-house delivery being the preferred option (as shown in the above chart).
Work activities that are often bundled include responsive repairs and planned maintenance; whilst (within our definitions) home improvement contracts are generally placed as individual contracts. The latter, in recent years, have been carried out under the Decent Homes Programme, which is reaching its final stages with just 13% of Local Authorities and under 3% of Housing Association dwellings being non-decent. Current expenditure (routine and planned maintenance) accounts for the largest expenditure on social housing, although trade sources have indicated that there has been a reduction in the level of planned maintenance in recent years.
Government spending cuts has seen many FS providers operating in the social housing sector seek to reduce their exposure to capital expenditure in favour of day-to-day maintenance work.
The report provides a detailed analysis of expenditure and facilities services provision within the social housing sector, broken down into the Local Authorities / ALMOs and Housing Associations /registered providers sectors.
- Carillion Facilities Management and Property Services
- Galliford Try
- Integral UK
- Interserve Support Services
- Jeakins Weir
- Kier Services
- KNK Building Services
- Lovell Partnerships
- Mears Group
- Morrison Facilities Services
- Pinnacle PSG
- Rydon Group
- Seddon Property Services
- Serco Group
- Vinci Facilities
- Wates Living Space
- Willmott Dixon Partnerships.