FM Weekly: Rising Costs, Long Partnerships and Who Really Gets to Bid

News • FM Talk

Five-year cost forecasts, a long nuclear FM extension, new evidence on who actually wins public contracts and an employment law deadline two weeks away: the week’s FM and procurement news, with a view on what each story means for those who buy the services.

This week’s theme was the price of continuity. BCIS published forecasts putting cleaning costs almost a quarter higher within five years, and the week’s most significant award was an extension rather than a competition: Mitie’s further three years with the Cumbria Consortium, including Sellafield. Alongside that, new data on which suppliers win public sector work, more firms taking places on the Government Commercial Agency’s FM framework, a reminder that ownership models in FM are moving in different directions, and the 30 October Employment Rights Act date now close. The CMA’s review of OCS’s takeover of Mitie has still not formally begun.

Costs and market

BCIS: cleaning costs forecast to rise by almost a quarter

The Building Cost Information Service’s latest forecast, published at the end of last week, expects maintenance costs to rise by 15.3% over the five years to the second quarter of 2031, and cleaning costs by 23.6%. Cleaning labour is forecast to rise by 24.4% against 7.6% for materials, and cleaning costs have already risen 9.0% in the year to 2Q2026. Energy is the volatile line: BCIS expects a 28.7% rise in 2026, then falls of 13.2% in 2027 and 14.6% in 2028, with geopolitics making the outlook highly uncertain. BCIS points to wage growth, the National Living Wage and the higher employer National Insurance contributions introduced in 2025 as the main drivers (FMJ).

FM Talk’s view: When labour drives almost all of the increase, the price adjustment clause matters more than the headline forecast. A mechanism tied to CPI will not track these costs; one tied to a labour index may pass them through in full, whatever is actually happening on your sites. Know which one your contract uses, and test every uplift request against the hours, rates and headcount on your own contract. A forecast is a planning tool, not a price.

OCS and Mitie: still at pre-notification

The CMA’s case page was updated on 14 October but still shows the inquiry at pre-notification, with both the formal launch and the phase 1 decision deadline yet to be set (CMA). The European Commission received its own notification of the deal on 22 September (EUR-Lex). Completion is still expected in the first quarter of 2027.

FM Talk’s view: Nothing has changed for clients, which means the window to act is still open. If you have not yet recorded a baseline of cost and performance from your own Mitie or OCS contract data, it is easier to do now than once integration starts.

Churchill Group repays its employee ownership loan

Three years after moving to an Employee Ownership Trust, Churchill Group has repaid in full the loan used to buy the shares. More than 70% of its staff are now employee owners, staff turnover has fallen by 17% in the past year, and average length of service for both management and frontline teams is over five years. It has also set up a 23-member Employee Transition Council to give colleagues a formal voice (FMJ).

FM Talk’s view: Last week’s theme was private equity consolidation; this is the other direction the market is moving. For clients, ownership matters mainly through its effect on the people who turn up on site. Staff turnover and length of service are among the most reliable early indicators of soft FM quality, and any provider can be asked for them. Ask for the figures for your contract, not the group average.

DTGen buys Realpower

DTGen, owned by DCC Energy Ireland, has acquired Irish generator maintenance specialist Realpower. The combined business has more than 110 staff, including 70 engineers, across Glasgow, Bristol, Northampton and County Westmeath, and expects to create at least 10 new jobs. The company cites data centre demand as a driver (FMJ).

FM Talk’s view: Standby power is often maintained by a specialist several layers down a TFM supply chain. Clients should know who that specialist is, whether it is changing hands, and whether their contract gives them sight of its test and service records.

Contracts

Mitie extends with Sellafield and the Cumbria Consortium

Mitie has been awarded a three-year extension to its integrated FM contract with the Cumbria Consortium, which includes Sellafield Ltd, with an option for a further two years. More than 600 Mitie staff will continue to deliver engineering, maintenance, cleaning, waste, grounds and catering services across sites in Cumbria and Warrington. The relationship began with a cleaning contract more than 20 years ago. Mitie reports that over the past three years 33 people have moved into permanent roles through apprenticeships and upskilling, more than 40 have completed work placements and nearly 100 have gained accredited qualifications. Separately, OneAxIoM, Mitie’s joint venture with Amentum, has been named preferred partner for Lot 1 of Sellafield’s nine-year PACE framework. No value was published (FMJ).

FM Talk’s view: Extensions are where a great deal of contract value is decided without a competition. Extending a well-run contract is often the right call, but the decision should rest on evidence: performance against the KPIs over the full term, a current view of price against what the market would offer, and a check that the specification still fits. The social value figures here are specific and countable, which is how such commitments should be reported everywhere.

AJS named preferred bidder at Lewisham

Essex-based hard FM provider AJS has been named preferred bidder by the London Borough of Lewisham (i-FM). Lewisham tendered its corporate estate hard FM as separate discipline packages, including building fabric, mechanical and electrical, each covering around 70 sites from offices and libraries to children’s centres (Find a Tender).

FM Talk’s view: Splitting hard FM by discipline widens the field to specialist and regional firms, which fits the data in the procurement section below. The trade-off is that the client takes on the interfaces: who owns a fault that spans fabric and M&E, which CAFM system holds the record, and who answers the helpdesk. Buyers who make this model work define those interfaces in the contract, not after go-live.

SHW appointed by Be First in Barking and Dagenham

Following a competitive procurement, Be First, the regeneration agency for the London Borough of Barking and Dagenham, has appointed SHW to provide operational property management across 250 commercial and mixed-use assets, mostly retail parades. SHW will handle tenant liaison, maintenance, inspections, compliance management and lease administration, while Be First keeps strategic asset management, investment and development (FMJ).

FM Talk’s view: Keeping strategy in house and outsourcing operations is a sound split, but the risk sits at the hand-off. Compliance across 250 small assets is exactly where records drift. The retained client needs asset-by-asset visibility of compliance status, not a monthly summary that says everything is in order.

Company of Cooks at Apothecaries’ Hall

Company of Cooks, part of Compass Group UK and Ireland, has won a three-year contract as food, drink and events partner at Apothecaries’ Hall, the City of London’s oldest surviving livery hall. The deal includes a dedicated on-site event seller, and the Society of Apothecaries chose the caterer partly for its sustainability and community commitments (FMJ).

FM Talk’s view: Where catering is an income line, the contract is really a commercial partnership. The measures that matter are event revenue, enquiry conversion and margin share, not meals served. Make sure the reporting gives you the sales pipeline, not just the takings.

Procurement

RFM takes seven lots on RM6378

RFM has won places on seven lots of the Government Commercial Agency’s Facilities Management and Security Services framework, RM6378, which is valued at up to £120bn and runs to August 2034. Its places include all three total FM lots, which are split by contract size: up to £2m, £2m to £15m, and above £15m (FM Business Daily).

FM Talk’s view: The framework continues to add mid-sized and regional suppliers, following Churchill last week. Because the TFM lots are banded by value, the size you put on a requirement decides who can bid for it. Work out whole-life value, including any extension options, before choosing a sub-lot, so you know which pool of suppliers you are actually inviting.

Who actually wins public sector work

Procurement Growth Group’s new SME Tendering Market Report analysed 12,477 award notices. Of these, 46.1% had a published maximum value below £250,000, and 2,983 were worth £100,000 or less. In the latest three-month snapshot, 42.9% of award lines went to suppliers registered in the buyer’s own region: 52.2% in local government, but only 33.4% in the NHS and 29.5% in policing. The median winning SME had been trading for 17.8 years, and only 7.5% of winners were under five years old. The figures count award lines rather than contract value. The report also finds that competition increasingly starts before the tender, through pipeline notices and preliminary market engagement (FMJ; full report).

FM Talk’s view: For buyers, this is a mirror. If you want a wider and more local field, most of the levers are yours: how you size and lot the work, how early you engage the market under the Procurement Act, and whether evaluation rewards relevant evidence rather than length of trading. The NHS figure is worth reflecting on for any trust with local social value ambitions.

Regulation watch

30 October: the next Employment Rights Act date

From 30 October, employers must take “all reasonable steps” to prevent sexual harassment, and become liable for harassment of their staff by third parties such as customers, contractors and visitors. Trade unions gain a new right to request access to workplaces, and union representatives gain further rights and protections (Walker Morris; Lodders). Most guidance also lists a new duty to tell workers in writing of their right to join a union from 30 October, although Brodies reports that this duty has been put back to January 2027 (Brodies). As noted last week, the unfair dismissal qualifying period falls to six months from 1 January 2027.

Two-tier code: timing now unclear

Last week we reported that regulations reinstating the two-tier workforce code were expected this month. Gowling WLG reports that the reference to the code was removed from the government’s implementation timeline on 25 September, and that when it will be introduced is now unclear (Gowling WLG). We have found no regulations laid so far.

HSE campaign on noise and vibration

On 13 October HSE launched a campaign urging employers to assess and control noise and vibration before permanent harm develops (HSE). Grounds, M&E, cleaning and waste services all carry the risk; we look at what it means for FM contracts in Good Vibrations? Not in Your FM Contract.

FM Talk’s view: Two of the 30 October changes play out on shared sites. A provider’s staff can be harassed by the client’s employees or the public, and a client’s staff by a contractor, so both employers now need to show they took all reasonable steps. Equally, a union access request will often concern a provider’s employees on a client’s premises. Agree with your provider now who receives such requests, who investigates complaints and how information is shared, and write it into the site rules rather than leaving it to the first incident.

The week in perspective

Continuity ran through almost every story this week: a long-standing contract extended, incumbent suppliers given more time, established firms winning most public work and an employee-owned business keeping its people longer. Continuity has real value, but it is not free, and with labour costs forecast to climb for five years, standing still will cost more each year. One thing I’ve noticed over the years is that the contracts that drift furthest from value are rarely the ones that fail; they are the ones that are renewed without anyone asking hard questions. The evidence to ask those questions is usually already in the client’s own contract data.

Questions to reflect on

1. If your main FM contract came up for extension next year, what evidence would you use to decide, beyond the provider’s own reports?
2. Does your price adjustment mechanism track the costs actually driving your supplier’s increases, or something else?
3. On a shared site, who handles a harassment complaint or a union access request involving your provider’s staff, and is that written down?