10 December 2010 |
Lindsay Clark
Essex County Council
aims to save up to £3.1 million by consolidating its facilities management (FM)
contracts.
According to council
cabinet papers, the authority could make savings by slashing around 670
suppliers within the FM category down to one or two. Currently, FM suppliers
produce 90,000 invoices annually, creating a huge administrative burden, the
documents said.
The present annual
budget for FM services is £24 million, comprising of £17.9 million of
third-party contracts and £6.1 million staffing costs. The council expects to
award the contracts to its chosen vendors to manage the services externally by
October next year.
The anticipated annual
revenue savings for the favoured strategy are in the range of £2.2 million to
£3.1 million from 2012. The decision follows the development of a category plan
for FM services, which gave a number of options for improved service and
savings.
“The precise level of
savings will not be known until tender responses are received from potential
suppliers,” the council document said. “However, soft market testing provides
ample confidence that these estimates are achievable. As such, the project
should pay for itself within five months of commencement.”
The council did not
reveal the life-span of the proposed outsourcing arrangement.
