Two thirds of social landlords 'not realising procurement's potential'

Will Green is news editor of Supply Management
1 November 2013

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Only a third of housing associations feel they have the resources to realise procurement’s full potential, according to research.

A report said registered social landlords are facing a “capacity challenge”, with just 14 per cent saying they have total spend visibility.

The research, by Jo Meehan of the University of Liverpool’s Management School on behalf of buying consortium Procurement for Housing (PfH) and Affinity Sutton housing association, found 70 per cent of organisations believed the importance of procurement was growing.

But the report said high-level executives needed to drive an “intelligence-led approach” from the top in order to “unlock greater efficiency”.

Directing more resources into procurement would help housing associations deal with the financial pressures of reduced government grants and welfare reforms, the report said. This could include investment in staff training and spend-analysis tools, which the report said was “the bedrock of an intelligence-based and more business-like approach”.

The report stated: “Procurement often suffers from an image problem with staff viewed as having a policing role that’s predominantly about compliance, audit control and EU regulations. Use of training to address gaps in skills and knowledge across the organisation will help nurture appreciation of its importance and allow it to play a wider strategic role.”

Andrew Carlin, commercial director at PfH, said: “It’s vital that organisations address this capacity challenge and this has to be led from the top. Chief executives and finance directors can unlock greater efficiency and get much better value from their procurement functions by leading the drive to a more intelligence-led approach.”

The research involved focus groups and surveys with 100 social landlords across England, Scotland and Wales.

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