Local governments in the United Kingdom are responsible for a range of vital services for people and businesses in defined areas. Among them are well known functions such as social care, schools, housing, planning and waste collection, but also lesser known ones such as licensing, business support, registrar services and pest control. Local councils, which are the most common type of local authority, are made up of councilors who are elected by the public in local elections.
The local government consists of at least one or two tiers of authorities. Two tiers, with responsibilities of local services divided between them are County Councils and District, borough or city Councils.
Structure
The structure of local government varies from area to area. In most of England, there are 2 tiers – county and district – with responsibility for council services split between them. London, other metropolitan areas and parts of shire England operate under a single tier structure with councils responsible for all services in their area.
In total, there are 333 local authorities in England made up of 5 different types:
- Unitary authorities
- London boroughs
- Metropolitan districts
- County councils
- District councils
Unitary authorities
There are 58 unitary authorities. They provide all local government services in their areas. These are mainly in the cities, urban areas and larger towns although there are now 6 shire county councils that are unitary (i.e. have no district councils beneath them).
London boroughs
There are 32 London boroughs. They provide nearly all the services in their area. However, the Greater London Authority (GLA) provides London-wide government, including special responsibility for police, fire, strategic planning and transport.
Metropolitan districts
There are 36 metropolitan district councils which together cover 6 large urban areas: the counties of Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, West Midlands, and West Yorkshire.
Metropolitan districts are responsible for all services in their area, although certain metropolis wide services such as fire and civil Defence, police, waste disposal and passenger transport are provided through joint authorities (the districts acting jointly).
County councils
County councils cover the entire county and provide around 80 per cent of the services in these areas, including schools, social services, public transportation, highways, waste disposal and trading standards. There are 24 county councils in 2-tier areas, providing services such as education, social services and waste disposal.
District councils
In 2-tier areas, each county council area is subdivided into districts, for which there is an independent district council. There are 181 district councils. District councils are responsible for local services such as garbage collection, housing and planning applications.
Town and parish councils
There are also approximately 9,000 town or parish councils in England. These operate at a level below district councils and unitary authorities. Because of their great diversity, parishes do not generally have statutory functions, although they are often responsible for smaller local services such as allotments, parks and community centers. They may provide other services with the agreement of the county or district council.
Sustainability & Carbon Neutrality – Role of Local Authorities
The urgent need for climate action has brought with it a whole new vocabulary to describe and support sustainable actions, targets and goals. “Carbon Neutral”, “Net Zero”, “Offsetting” and “Sustainability” have become buzzwords for whenever we talk about climate action. With over 300 local authorities declaring a climate emergency, and nearly two thirds of councils in England aiming to be carbon neutral 20 years before the national target, councils are well placed to support Government to meet its net zero carbon ambitions by 2050.
Since net zero can only be achieved with decarbonization happening in every place across the country – that’s every household, community and local economy – it will require local leadership. The Local government Association (LGA) is committed to work towards building a partnership between central and local governments to tackle climate change.
The Local Government Association commissioned WPI economics to produce a business case for the local delivery of low carbon infrastructure projects. Through a focus on buildings, transport and energy, it provides the strategic and economic case for why and how councils can unlock economic, social and environmental value and looks at the co-benefits that councils can bring in health, job creation and a reduction in carbon emissions. With the right investment and support, councils can go further and faster to achieve net zero and many councils are already leading the way.
Facilities Management (FM) Services in UK
The UK is one of Europe’s most developed and comprehensive markets for facility management services with regard to size & sophistication. Due to the widespread use of facility management services, vendors are now increasingly focusing on using specialized services to gain a foothold in the market, which has also witnessed several changes due to the macro-economic and social changes in the country.
Over the last decade, several service vendors operating in the country have been focused on expanding their presence to leverage the growing demand for facility management, especially with the recent trend favouring the outsourcing of non-core operations. The country has been witnessing an increased number of opportunities to leverage facility management and corporate real estate in innovative ways, given the dynamics across the country.
Key trends suggest that the United Kingdom continues to attract investment opportunities from global specialist facility management companies to address challenges in the local, fragmented markets. Large strategic buyers are highly active, mopping up smaller rivals, and private equity investment is rising as financial sponsors continued to finance the deployment. Moreover, technology-enabled business models have resulted in rising valuations in the country.
Local Government and Facilities Management (FM) Services
The Local government authorities are one of the largest buyers of FM services in the united Kingdom. As per our contract database, the Local government authorities command a Market Size of £21.7 Billion translating to around 20% of the overall FM Market size in terms of Total Contract Value. We will have a look at broader service type dissection as well as the share of specialized services outsourced by local government authorities through this article.
Service Type dissection
- The Hard & Soft FM services are almost equally sought by the Local government authorities in total contract value terms.
- Hard FM Service with a Total Contract value of £6 billion have a 44% share in the overall value business with Repair and Maintenance services taking the lead.
- Soft FM services command a 42% share in the value pie with contracts worth £0 billion with Waste management services being the most availed by local authorities.
- The share of Integrated services from same supplier is 14% to this sector with a total contract value of £1 billion.
Recent Outsourcing performance
A clear pattern emerges from a look on the extent of outsourcing from the local government authorities over the last six quarters. The below given trendline clearly shows a co-relation of business as usual vis-à-vis abating of pandemic. While the amount of outsourcing showed a declining trend in all the four quarters of 2021, the trend shows a constant growth in the first two quarters of this year with contracts worth £245 Million & £377 Million being awarded respectively.
Among the top suppliers to local government authorities are specialist players in waste collection & management which are the most sought after services by the local authorities. In addition, the sector also avails cleaning and Repair & Maintenance services in equal measure.
Apart from serving the Local Government Authorities, the overall FM market in UK is one of the largest markets in Europe in terms of maturity and sophistication. The market is highly competitive owing to the presence of several organized players and strong presence of top global companies, such as Mitie, ISS, Sodexo, CBRE, JLL among others. It is a large market with some estimates putting the annual revenues in the vicinity of 40-45 Billion USD. As per Baachu Database, however, the total contract value remains in the range of £100 Billion for Contracts with terms ranging from one to 10 Years on an average. To have a detailed view of the UK FM Market with complete sector & services breakdown, please download our comprehensive report here https://baachurain.com/product/uk-facilities-management-market-2022-2025-report/
This report is unique for its treatment of the growth aspect being based on the real contracts and their value. The report complements similar report from Frost & Sullivan as that report gives a glimpse of future growth based on revenues while Baachu has used Total Contract Value as the basis.
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