UK fire sector report outlines four drivers of organic growth

Fire sector growth drivers outlined in new report

DC Advisory and Fairgrove have published a report on how operators in the UK fire and security sector are pursuing organic growth in a competitive market.

Titled Igniting Growth: Organic Levers for UK Fire & Security Services, the report is based on interviews with CEOs of private equity-backed businesses and sets out the strategies being used to improve performance, scale operations and strengthen margins.

It says the UK fire and security sector remains highly fragmented, with more than 3,000 businesses working across active fire, passive fire and security services.

The report links continued investor interest in the sector to regulatory requirements, recurring inspection cycles and long-term service contracts that support stable revenue streams.

Recent growth is tied to regulatory change following the Grenfell Tower fire, including the Fire Safety Act 2021, Fire Safety (England) Regulations 2022 and the Building Safety Act 2022.

Those measures have increased compliance requirements and led to higher levels of inspection, remediation and maintenance activity across the built environment.

The sector is expected to grow at around 6% to 7% annually through to 2030.

Organic growth moves higher on the agenda

The report states that investors are placing greater emphasis on organic growth and operational performance, even as buy-and-build strategies remain common.

DC Advisory and Fairgrove identify four pillars behind that shift: commercial engine, commercial discipline, people model and operational leverage and productivity.

It describes increasing contract penetration and recurring revenue as central parts of current growth strategies.

Operators are focusing on cross-selling services across fire and security portfolios where appropriate.

They are also prioritising up-sell work such as remedial works and lifecycle upgrades.

The report says up-sell activity can generate between £1 and £3 of additional work for every £1 of planned maintenance activity, depending on the asset base and contract structure.

It adds that winning new business remains difficult because of high customer retention and procurement barriers, particularly in the private sector.

Service quality and long-term client relationships are presented as the main drivers of sustained growth.

Technology and workforce pressures shape performance

The report says technology is becoming a larger factor in improving operational performance without major capital investment.

Field service management platforms are being used to improve scheduling, engineer utilisation and job reporting.

Digital tools are also being used to improve response times and customer experience.

The report says some providers are starting to use more automated and self-testing systems in higher-spec installations.

That change may reduce routine maintenance workloads and increase margins through higher-value service activity.

Recruitment and retention of engineers are identified as a constraint on growth across the sector.

Companies are expanding apprenticeship programmes, recruiting from adjacent industries and investing in in-house training academies to increase workforce capacity.

Retention measures such as improved benefits and referral incentives are also being used to reduce churn and protect productivity.

The report adds that better parts management, route optimisation and technician scheduling can improve first-time fix rates, reduce unproductive time and raise jobs per engineer per day.

DC Advisory and Fairgrove say firms that pair operational discipline with technology use, workforce development and customer retention are expected to perform more strongly as the market matures.

Industry responds to commencement of Fire Safety Act

The UK government’s Fire Safety Act 2021 and the Building Safety Act 2022, which have both now come into force, have been met with mixed response from the British fire and safety industry.

The National Fire Chiefs Council (NFCC) welcomed he publication of the government’s White Paper on Fire Reform which focusses on driving forward reform, strengthening governance and improving talent and professionalism.  

According to NFCC, the white paper and subsequent consultation provides a further opportunity to continuously improve what fire and rescue services already do and to reach into new roles and responsibilities to respond to local risk and support partner services. The reforms can build on the fantastic work already carried out every day.  

NFCC Chair Mark Hardingham commented: “I am pleased to see today’s long anticipated publication of the white paper together with the announcements on fire and building safety.  

“The public have great confidence and trust in firefighters and their fire and rescue services. We all carry a collective responsibility to build on that reputation in how we shape the fire and rescue service for the future – with the needs and expectations of the public at the forefront of our thinking. 

“NFCC has a significant role to play in advising and delivering on reform and improvements. However, no one organisation alone holds the key – we want to work with the various fire service bodies to inform and implement further improvements.” 

The Council said it would now respond to the consultations after exploring the recommendations in detail with fire and rescue services.  

A perfect storm

The Fire Industry Association has said the new legislation will create a ‘perfect storm’ for fire risk assessors, as they will now face additional challenges when it comes to satisfying new legal requirements designed to meet fire safety competency standards.

The association raised the issue thattThe legislation requires that a building’s external walls be considered as part of any fire risk assessment, which has been much debated by the industry. The Building Safety Act goes further still, it said, placing a clear duty on ‘Accountable Persons’ and ‘Responsible Persons’ to confirm the competency of any fire risk assessor whom they appoint to assist them in undertaking a building fire risk assessment.

It also noted the lack of detailed definition around the term ‘competent’, which then puts these ‘duty holders’ under considerable pressure to make the correct choices.

Dennis Davis, executive officer at the Fire Sector Federation, said: “Those accountable for building and fire safety, including fire risk assessors operating without clearly demonstrable competency, need to make sure they’re ready now.

“They must fully understand the implications of demonstrating compliance with their obligations under the new legislation. Using existing third party assurance schemes that demonstrate fire risk assessors are competent is a practical way forward for clients. Joining such schemes or engaging with those organisations developing standards will allow qualified professionals to show they’re competent. It’s a way forward for contractors.”

He added: “We need to face up to these challenges if we are to avoid a ‘perfect storm’ in the fire risk assessor sector which could undermine fire safety in our buildings.”

‘An attack on workers’ rights’

The Fire Brigade Union called highlighted the white paper’s review on pay and move to operational independence of Chief Fire Officers. Matt Wrack, FBU general secretary called it ‘an attack on workers’ rights by undermining collective bargaining and a proposal to remove frontline firefighters’ voices.

He said: “The narrative set out in the white paper on the fire service’s response to the pandemic is one firefighters will not recognise. Firefighters, through their union, negotiated a contract which kept them safe and allowed important work to protect the public to take place. Before this agreement, Covid positive firefighters were deployed to doorsteps – not something certain chief fire officers can be proud of.

“We’re proud of how the tripartite agreement was achieved through our long-standing arrangements, and attempts to belittle it are false and insulting.

“The vast bulk of this white paper does not relate directly to Grenfell recommendations. It is unclear why the government is trying to paint this picture. Instead of listening to frontline firefighters, the government appears to have listened only to the anti-union voice of the politically motivated, including outgoing fire inspector Tom Winsor, and fire bosses. We look forward to working with the government to address these proposals and making sure that frontline firefighters are heard.

“The union has never opposed clarifying the role of a firefighter and in some instances, expanding that role, and we have tried to have these discussions with ministers for over a decade. It is ministers who have failed to answer these questions. It is imperative that any changes are properly negotiated and discussed with frontline firefighters – it is their say that should matter most. 

“The proposals on governance suggests that we could see more Police Fire and Crime Commissioners. Throwing fire in with police means fire and rescue services do not receive enough scrutiny. Furthermore police and fire are very different functions and there is a vital need to maintain the neutrality of fire and rescue services in the public perception. If this breaks down it will make the work of fire and rescue services in communities far more difficult.”

RECOM to open new fire training academy

RECOM Solutions is set to open a new training academy, as part of a significant investment from the Trafford Park fire protection services firm.

The move is in response to huge growth in demand for its fire protection services, which has seen the firm increase its specialist operatives from five to 30 in the past 18 months, the BusinessDesk.com reproted.

This is in addition to its team of surveyors, contract supervisors and project managers in its fire protection arm. The academy will offer a live environment for training staff in the latest fire protection measures, legislation and products which are new to the market, such as new laws concerning cladding on structures of multiple occupancy, including high rise apartment blocks.

RECOM, a UK-based firm, works with a range of clients, ranging from the residential, to care home, healthcare, commercial, leisure, education, heritage buildings and industrial sectors.

The business is an approved contractor under the UK’s Fire Accreditation Scheme (FIRAS), and director, Jason McKnight, said the academy is due to be launched in the spring ahead of the implementation of the Fire Safety Act in England, which seeks to improve fire safety in multi-occupancy buildings.

McKnight said: “We have positioned ourselves ahead of the field by being able to provide a holistic approach to projects, linked to the new legislation.

“We act in both client side and contractor roles, utilising innovative cloud-based software to ensure clients have up to date relevant information on fire safety. This is the ‘golden thread’ of information that will become a legal requirement for building owners, developers and the like.”

He added: “The new academy will further demonstrate our commitment to retaining our leading market position in the provision of fire safety services.”

RECOM acts as a construction project manager and main contractor in addition to its role as a fire protection and cladding replacement specialist.

“The need for robust fire protection measures in buildings has been brought into sharp focus in recent years, and we are proud to be playing our part in helping to improve building safety and create smart, safe and sustainable places where people thrive, across the North West and beyond,” McKnight added.

The academy will enable RECOM to train and develop new employees and to educate its clients on the importance of fire protection measures within buildings. “We fully expect that the Fire Safety Act will lead to further expansion of our fire protection operations.”