David Parrett, Director at Cadaema Consulting Services, asks ahead of the 'Council Estates Under Pressure' webinar why councils have never developed a coherent approach to facilities management, despite overseeing more space than the NHS.
Every organisation that holds property needs facilities management (FM). The level of this service and its objectives will vary depending on the organisation in question but the existence of a need of some sort is guaranteed. Yet, for some reason, local government has not created a consistent strategy for how it will deliver or procure these services.
Despite its scale, complexity, and strategic importance – councils in the UK occupy an estimated 56.4m square metres of space (for context that’s more than double that of the NHS) – FM in councils has never achieved high recognition.
Across the UK there is a recognised and mature market of suppliers who specialise in delivering these services and have built significant technology platforms that drive service efficiencies and higher quality, sustainable outcomes.
You would think that the existence of these two facts would create an obvious – and commercially positive for all stakeholders – outcome. It hasn’t yet.
The question is not simply why councils don’t outsource FM more often, but why the market itself has never coherently formed. The answer has four key elements to unpack.
Political sensitivities and public perception
Outsourcing in local government is always politically charged, but FM carries a particular sensitivity: people.
FM staff are often long serving council employees on relatively low pay grades embedded in communities. Outsourcing them can trigger union resistance, public concern, and reputational risk. Even when outsourcing could deliver efficiencies, the political cost can outweigh the operational and commercial benefit.
The complexity of council assets
FM outsourcing thrives in environments with standardised assets – office portfolios, retail estates, industrial sites. Local government is the opposite. Councils manage Victorian town halls, modern leisure centres, temporary housing units, listed buildings, and schools built across multiple decades of architectural fashion. Each asset has its own compliance requirements, maintenance history, and operational quirks.
This diversity makes packaging FM into a single outsourced contract extremely challenging. Providers struggle to price risk accurately, and councils struggle to define service levels consistently. The result is a market that sees local government FM as high risk, low margin, and operationally unpredictable.
Budget structures that don’t favour outsourcing
Local government finance is complex. Capital budgets, revenue budgets, ring fenced grants, and statutory funding streams all intersect with FM. Outsourcing requires long term financial commitments, but councils often operate on short term budget cycles driven by political priorities and central Government funding settlements.
This misalignment discourages large scale FM outsourcing and coherent strategies about managing property portfolios over long periods of time.
Lack of national policy direction
Unlike waste management or social care, FM has never been the focus of national policy reform. There is no central Government strategy encouraging councils to outsource FM, no national framework contracts designed to standardise delivery, and no regulatory pressure pushing councils toward market solutions.
Without policy drivers, FM outsourcing remains sporadic and inconsistent. Individual councils may experiment with outsourcing, but these isolated cases do not create a sector-wide market.
The future
All that said. Outsourcing should not be considered to be the answer to everything. Badly planned and managed contracts can do more harm than good and when such a significant chunk of the cost base of these services is human beings, this can be disastrous.
But unless councils begin to treat FM as a unified discipline – and unless providers develop models tailored to the unique complexity of local government – the sector will remain fragmented.
FM in local government is not an unfulfilled outsourcing sector because it lacks importance. It is unfulfilled because it is complex, often too political, too fragmented, and too culturally embedded to fit neatly into the outsourcing frameworks that transformed other public services.
The opportunity is there. The question is whether councils and providers are ready to seize it.
