22 October 2007 | Paul Snell
The drive for efficiency in housing development should not exclude small and minority businesses, a report has said.
Promoting Supplier Diversity in Development Procurement, a report by the London Housing Federation (LHF), said despite some progress in improving diversity in maintenance contracts, it had been harder to introduce in development deals.
Housing associations in the capital told LHF there was still a perception small and minority businesses were not on the "value for money" agenda.
The LHF argued housing associations did not have to deviate from value for money principles to encourage supplier diversity. But it added the collection of many small contracts into one larger one, as advocated by two government reports, was likely to lead to the exclusion of small businesses.
It also said the improvement of supplier diversity was necessary to contribute to the social and community aspects of sustainable procurement. "Housing association investment should try to make the most of every pound that is spent; attempting to ensure that is used to revitalise the local economy. Money does not circulate into the local economy unless local employees, contractors and suppliers benefit from this investment," it said.
Associations claimed supplier diversity was still seen as something "extra" and not integral to the procurement process.
The report added housing groups need to monitor the supply chain of their main contractors to ensure diversity is developed within the supply base. It suggested federations nominate sub-contractors to be used on larger projects, to work with big contractors.