1 February 2012
Seven out of 10 FMs – whether supply-side or client – are revisiting their budgets to see where further savings can be made, according to the latest FM 100 Poll.
“The problem is we’re doing year-on-year budget cuts while trying to maintain a quality service,” said one respondent. “How much more cutting can we sustain, when so many FM costs are fixed, such as rent rates?”
If official economic figures are to be believed, the answer could be that a lot more budget cuts are on the way.
Britain’s economic activity shrank by 0.2 per cent in the last three months of 2011. Economic activity for the third quarter of 2011 expanded by 0.6 per cent, figures from the Office of National Statistics noted.
Many economists technically define recession as two consecutive quarters of contracting GDP. Given the decline in GDP for the last quarter 2012, we hold our breath to see what will happen for the first quarter 2012.
Regardless of what the economy is doing, “it’s always worth reviewing services to ensure best value is being obtained”, said one FM 100 respondent.
“This is particularly true in the present climate, when service providers are very keen to take on new business,” he said. “Reviewing services highlights areas that are not necessarily useful or essential, therefore making it possible to reduce costs without cutting corners.”
The imperative of continually reviewing budgets is obvious, said another FM. Of course, as an FM supplier there is also the search to maintain healthy margins. Because we’re in our 4th year of a five-year contract, there’s a massive focus on trying to further reduce costs to make it hard for the client to resist us when the contract expires.”
Another FM forecasted “extremely aggressive spend reductions for the next five years. However, we would be worse off without the opportunity to really look hard at how we do things.”
At least one respondent questioned what all the fuss is about when it comes to reviewing budgets. “FMs should be doing this anyway, either as part of your usual strategy, whether you are a client, supplier or third party services provider.
Other news for Wednesday, 1 February 2012
DIO lists four in £1bn training estate deal
FM World launches 2012 Salary Survey
Blue Light nabs £129m police PFI
FM 100 Poll: budget revisions commonplace
Integral takes on HVAC at Yorkshire Water
Contracts round-up
FM World Blog: Have you thought through your processes?
website
website