The UK custodial estate is a specialist market where facilities management is inseparable from wider operational delivery. Unlike hospitals, offices or schools where FM can be let as a stand-alone service, in prisons and immigration removal centres it is embedded within integrated contracts. This creates both complexity and opportunity for FM providers. To compete effectively, companies must consider how they will structure their delivery models — either as a prime contractor retaining overall responsibility or as part of a joint venture with established custodial operators. Each approach offers advantages and risks, and understanding these is essential for positioning in the 2025–2030 renewal cycle.

The prime contractor model places a single provider at the head of the contract. Under this arrangement, the FM company assumes overall responsibility for the delivery of both hard and soft FM, self-delivering what falls within its core competence and subcontracting the rest. For example, a provider may retain building fabric maintenance, M&E systems and security infrastructure in-house, while subcontracting catering or cleaning to a specialist.

The key strength of this model lies in control. The prime contractor manages all risks, controls integration across services and presents the client with a single point of accountability. For the Home Office and Ministry of Justice, this can be attractive: fewer interfaces mean clearer governance and reduced risk of disputes over responsibilities.

However, the prime contractor model also carries significant burdens. The lead provider must be able to demonstrate financial capacity to underwrite contracts that can exceed £200 million in value, such as the Heathrow IRC retender. They must also manage the risks of subcontractor performance within a high-security environment where failure is not tolerated. Mobilisation becomes more complex, as the prime contractor has to coordinate multiple workforces, all requiring security clearance, and align them under a single governance framework. In practice, only FM companies with substantial balance sheets, proven custodial experience and established compliance frameworks can credibly pursue this route.

The alternative is the joint venture model. Here, an FM provider partners directly with a custodial operator — such as Serco, Mitie, Sodexo or MTC — to form a combined delivery vehicle. The operator brings custodial and welfare expertise, while the FM partner contributes technical and infrastructure management capability. Risks and rewards are shared, and responsibilities are divided along natural lines. For many FM providers, particularly those without a track record in secure operations, this approach offers a credible way into the market. Joint ventures allow FM specialists to focus on their strengths while benefiting from the operator’s experience of security, welfare and compliance in high-risk environments.

The joint venture model also resonates with current Home Office and MoJ preferences. In both prisons and immigration removal centres, clients emphasise integrated solutions that minimise the number of contractual interfaces. Joint ventures present a unified face to the buyer, demonstrating that custodial and FM expertise are aligned from the outset. They also distribute risk more evenly, reducing the exposure of any single partner. However, joint ventures come with their own challenges. Governance must be carefully designed to prevent duplication or conflict. Cultural differences between FM providers and custodial operators can slow mobilisation. Profit margins are shared, and decision-making can be slower than in a single-lead model.

Examples of both models can be found in the current market. Serco operates several immigration removal centres where FM is integrated into its custodial contracts, effectively acting as prime contractor. Mitie combines FM and custodial expertise in its management of Heathrow and Dungavel, leveraging its heritage as an FM specialist to integrate hard services into custodial delivery. Sodexo, traditionally a soft FM and catering specialist, has built its custodial presence around fully integrated contracts that blend welfare and facilities seamlessly. MTC, a relative newcomer in the UK, has pursued partnership-based models, combining its overseas custodial expertise with local FM capabilities.

For FM providers considering entry or expansion, the choice between prime contractor and joint venture should be strategic. Smaller or mid-tier providers are unlikely to convince the Home Office or MoJ of their capacity to act as prime contractors without demonstrable experience in secure estates. For these companies, partnership with an operator is the most credible pathway. Larger FM companies with custodial track records may consider pursuing prime contractor roles, but they must be prepared to carry the financial and reputational risks that come with them.

Irrespective of model, what matters most to buyers is the quality of integration. The Home Office in particular is clear that IRC contracts cannot separate FM from custodial operations due to security and operational complexity. Prisons follow the same logic. Whether through a prime contractor structure or a joint venture, bidders must present a cohesive solution where FM and custodial services are mutually reinforcing, not siloed. Clients want reassurance that governance, mobilisation and day-to-day delivery will be seamless.

The implications for bid strategy are significant. Providers must identify early which model they intend to pursue and shape their partnerships, governance and mobilisation plans accordingly. Attempting to switch approach late in the procurement process is rarely successful. Early alignment also strengthens credibility with clients, demonstrating that bidders are not improvising solutions but entering competitions with a clear and deliberate strategy.

The 2025–2030 renewal cycle will test both models. The Heathrow IRC retender, the Haslar reopening and the Amey Northern Prison FM expiry will require bidders to show how their chosen delivery model reduces risk, ensures compliance and integrates with custodial operations. Those who present vague or unconvincing structures will struggle to compete against established operators with proven models.

For FM providers, the message is clear. Choose your model early, invest in building partnerships or internal capacity, and ensure your bid demonstrates integration at every level. The difference between winning and losing in this market is not the label applied to your model but the credibility with which you present it.

At Baachu, we specialise in helping providers structure their delivery models for secure estate bids. Whether acting as prime contractor or forming a joint venture, we work with FM companies to design governance, build mobilisation strategies and create commercial frameworks that satisfy Home Office and MoJ scrutiny.

If you are preparing to compete in the upcoming cycle, now is the time to define your approach and build the structures that will underpin a winning bid.

Contact us at hello@baachu.com to discuss how we can help you shape, position and deliver FM partnership models in the UK custodial estate.

Check out the new article on Compliance Rules in Prisons here