The Future of Facilities Management: Life After Brexit?

Now that the dust has settled after the cataclysmic EU referendum result announced on 24th June, I thought it would be a good time to take a look at how the future of the Facilities Management industry is shaping up.

There have been a number of high-profile reactions within our sector to the news, which hasn’t all been positive. For example, the new BIFM chief executive Ray Perry called upon the government to ‘lead us through the short-term volatility’ after the referendum. Although he didn’t necessarily call the outcome bad news, he did warn that there would be a ‘period of uncertainty for the UK economy and the facilities management services that supply it.’

But others are remaining positive. The president of the Chartered Institution of Building Services Engineers says we can expect “life after Brexit”. He said: “We do not anticipate any significant alteration in the very positive engagement we maintain with members across the globe and suggest that the referendum result creates significant opportunities and commitments to increase engagement with regional, national and global interests.” 

But that’s enough from the talking heads. What tangible impact will we see on the market many of us depend upon? My thoughts are that the cost of labour may well be the biggest downside to the referendum result, given that it already makes up the largest portion of cost within FM. I know that several FM services employ workers from other EU member states. If there are restrictions on the free movement of labour, which looks likely, there may be a reduced supply of workers, meaning companies have to pay more to get the people they want. Initially, I was worried that imported equipment, parts and consumables might also rise in cost due to our weakened currency and potential tariffs, but now I’m more optimistic, as sterling seems to have stabilised and is on its way back up again. Britain is an important trading partner for the EU, so they won’t want to be too harsh or restrictive on future trade deals – it’s in the mutual best interest to ensure trading can continue at the significant levels it was before.

Some contracts and legal agreements may also have to change, based on the fact they were penned when the UK was part of the EU. I would recommend that all FM business owners keep abreast of the legislation changes, as I’m sure information will trickle into the news once Article 50 is triggered. In this sense, it’s been good news to hear our new Prime Minister, Theresa May, announce that she will be delaying the exit as it allows us all time to prepare. The new contracts will need to be put together to reflect a new political - and potentially a new economic - situation as well.

I also see some reason to stay optimistic after Brexit, though. As a country we’re now free to strike up contracts and deals with the rest of the world. There have been some encouraging noises made in China, India, and Australia about the free trade agreements that could be on the cards, and for that reason I wouldn’t be too downbeat about the referendum result, even if we do have a little bit of turbulence in the short term. Depending on the terms of the agreements we strike, the potential gaps in labour that might be caused by leaving the free movement zone could be offset by our new partners. Plus, it’s worth noting that Theresa May has dismissed the possibility of using an ‘Australian-style points-based system’ in the first place for immigration. She has said Britain will be ‘open for business’ as usual, and so I think she will be keen to ensure that labour can continue flowing into the UK by whatever means necessary.

In conclusion, although we need to wait before the true impact of Brexit takes effect, after the initial panic things have returned to a pretty stable position for our industry, and the outlook may still be positive if the free trade agreements we’re looking to strike goes well. While we’re still in the EU, it may be a good time to ensure you have key vacancies fulfilled and it’s also worth thinking about whether your leadership team is flexible enough – and capable enough of strategic thinking – to continue your growth despite probable legislative changes.