The Government could save 10% on its catering and FM bills through outsourcing, according to a new report by the British Hospitality Association (BHA).
The 22nd annual food and service management (FSM) report, published in conjunction with the Foodservice Consultants Society International (FCSI), has outlined opportunities for savings in the public sector if more contracts are outsourced to private businesses.
In 2010-2011 the public sector spent more than £2.1b on food and catering and 5% (£11.3b) of its £235b procurement budget on total facilities management (FM) outsourcing. FSM companies provided 610 million meals for the public sector, less than one quarter of the total 2.4 billion meals provided in 2011.
Up to 10% cost savings could be made by outsourcing health and education FM, according to the CBI's Open Access report published in September, but in order for the cost saving benefits to be reaped the Government needs to remove the barriers that prevent small and medium sized firms from competing on a level playing field, the report urged.
More than £70b of government contracts across 13 different sectors are set to be put out to re-tender over the next five years and Phil Hooper, chairman of the BHA's FSM forum said that FSM and catering are prime examples of low hanging fruit where the government could make savings.
"The scale and complexity of many large-scale contracts further lend themselves to outsourcing. We are simply asking the government to take advantage of the world class talent within the UK FSM industry."
The report, entitled Outsourcing 2012: Removing the Barriers for Catering and Facilities Management, outlined four key recommendations for government action:
• Remove barriers to outsourcing so that small and medium sized companies can compete on a level playing field.
• Improve the commissioning process so that the government's own procurement people and systems are up-skilled.
• Set a clear overall vision for a more strategic outsourcing provision and make use of the world class skills available in the UK.
BHA chief executive Ufi Ibrahim concluded: "Our nation marches on its stomach, and this report sets out the opportunity to look again about how these meals are provided. We have set out some clear recommendations for government to recognise the value of this sector and also some firm commitments on behalf of our members."
By Janie Manzoori-Stamford
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