Royal London consolidates FM with Mitie, targets energy efficiency gains


Royal London has consolidated FM services with Mitie under a five-year deal.

The insurance giant is aiming to achieve at least 10 per cent energy efficiency gains and Mitie will install sensors across its estate to measure consumption of key kit, and then manage it down.

The FM provider said it will also use sensors to collect data on workplace occupancy and optimise office layout on the back of data gleaned.

The contract covers engineering, cleaning, waste management, security, help desk, and front of house services.

Mitie is backing smart technology and carbon reduction services to transform its business. Two and a half years ago, in the aftermath of Carillion’s collapse, the FM sector appeared to be on the brink, unable to make money from low margin contracts signed in a bid for growth at all costs. In June 2018, chairman Derek Mapp called for a “recalibration” of the sector with regard to contract pricing. Then in year one of a three year restructure programme, Mapp said the scale of Mitie’s problems were “far more significant than was earlier anticipated.”

Now in the final stages of that turnaround programme, Mitie last month posted an annual profit increase of 8 per cent and confirmed plans to buy the rival outsourcer Interserve’s FM unit for £271m.

It has committed to decarbonise its business within five years and to use the learning to steal a lead on rivals. Mitie now touts decarbonisation as a service to clients, who are coming under increasing shareholder pressure to reduce carbon footprints. Using a performance contracting model, Mitie claims it can decarbonise clients businesses at no upfront cost, using efficiency savings to pay for lower carbon equipment.

However, the sector must now navigate the impact of Covid-19 on clients’ businesses – in terms of frozen spending plans, impact on operations, building occupancy and consumption, plus debt management and any resulting contractual reopenings.


Please enter your comment!
Please enter your name here