Associations target £1.5bn savings on repairs budget

28 April 2004
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29 April 2004

A proposed purchasing initiative for housing associations could slash the national cost of repairing Britain's social accommodation by up to £1.5 billion a year.

Procurement for Housing (PFH) has been set up after a two-year trial in which 35 housing associations obtained discounts of up to 75 per cent by buying goods and services collectively.

The next step is to include joint procurement of building materials for construction and maintenance firms, said Julie Craig, director of PFH, which is run by management consultancy Collective Enterprises.

The proposal is to move towards centrally held stocks of materials that could be made available to contractors as needed.

She said Britain's 2,000 housing associations spend about £5 billion a year on repairs and joint procurement could shave up to 30 per cent off the bill.

But Craig admitted that because housing associations had been slow to adopt the principles of joint procurement, it would need a sea change in attitude to make the initiative a success.

"There is a competitive mentality generally in the sector, and we need to change that to a more co-operative one."

She added that buying materials centrally and allowing smaller local contractors to bid would increase the skills of the local workforce "and create jobs, so there is a social aspect to it as well".

PFH has been set up by the National Housing Federation, the housing associations' trade body, and the Chartered Institute of Housing, an employees' group.

It is co-ordinated by HouseMark, the online advice, database and benchmarking website for housing associations.

The associations have not had to account for how they spend their money before, according to Anne Flynn, executive director of corporate services at the Harvest Housing Group association, who helped to set up PFH after taking part in the pilot.

"Checking our invoices rigorously led to the discovery that we were mistakenly billed for electricity from a couple of meters outside our properties."



News focus: Housing procurement under one roof



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