Andrew McAllister: How social landlords can combat rogue materials spend

Asset management teams have got a lot on their plate right now. Preparation for Awaab’s Law, fire safety demands, net-zero standards, a serious skills shortage and tough tenant satisfaction targets. But there is one issue that comes up again and again: the spiralling cost of repairs and maintenance.

When I ask asset managers about this, their response is less to do with rising materials prices and more about contract ‘leakage’.

These leaks don’t appear right away. When a materials tender is conducted, merchants are appointed and discounted prices secured. But as time goes on, items outside the agreed shopping basket are purchased and inefficient spend builds up.

This happens more often than you think, and it’s easy to see why. Asset teams are hugely stretched. In-house joiners, electricians and plumbers want quick access to products they trust so they can fix problems first time, but over the lifetime of a contract, the items they use most - from nails and screws to silicone and cable - often change.

Managers, too, are busy running high quality repairs services that deliver on residents’ needs. Contract management is resource intensive, particularly around materials where a wide range and high volume of goods are used. Asset managers have to juggle supplier behaviours and operative preferences, along with stock availability and replenishment complications.

On top of this, I’ve heard that some housing associations and councils, with lower materials spend, have no contract in place at all with merchants. As a result, operatives are paying sticker price for items which leads not only to escalating costs but also supply issues as merchants are not contracted to have certain items in stock and operatives can often be left sitting on their hands.

So, how can social landlords address the creeping problem of uncontrolled materials spend?

Regularly review your basket

If your housing association or council has a catalogue-based materials contract, you’ll have a core list of 500 or so fixed-price items repeatedly used by operatives. But repairs contracts can last for years and the person who agreed core items may move on. With them goes an understanding of the shopping basket and why certain products were chosen in the first place.

Changes also happen across repairs jobs. The type of maintenance work needed may change and so too will the materials required. Some core products may become obsolete, with off-contract alternatives used more frequently.

The key here is to review your materials catalogue, so it continues to cover roughly 70% of operative purchases. If you track both the quantity and cost of items bought outside the agreed range, you can use this insight to amend your basket of goods so negotiated discounts remain relevant.

Find quick ways to surface data

Accurate insight is essential for managing contracts well. It gives you a clear, behind‑the‑scenes picture of how materials are actually being bought across your organisation.

But issues are hard to spot unless you have robust, consistent and timely systems in place. Look at the management mechanisms in your existing contracts. Do you have a contract review period built in? How often are prices assessed? Is automated price checking in place? Which mechanisms can pinpoint operatives who buy more costly items from their preferred merchants?

Work fairly with suppliers

Collaborative merchant relationships are central to enabling both parties to succeed. If merchants are going to guarantee stock availability, first time fix and high levels of customer satisfaction, they must be able to make their margins. This is a delicate balancing act for social landlords, treating suppliers fairly but also robustly, for example researching their cost structures to ensure price rise requests are justified.

Check if contracts are in place

It may sound obvious, but make sure you have an official materials agreement. In some instances, when a social landlord’s materials contract ended during Covid, a new one was never agreed. Operatives have been paying retail prices ever since and merchants are in the dark around a housing organisation’s stock needs.

Even if your housing organisation’s materials spend comes under the £50,000 threshold for compliant spend, it’s worth exploring solutions such as materials frameworks to benefit from economies of scale, vetted suppliers and stock level KPIs.

Engage operatives and shift behaviours

Understanding operative behaviour is as important as reviewing spend, tracking prices and surfacing data. Yes, tech tools such as analysis platforms, van stock management tools and account cards can highlight purchasing patterns, but value also comes from engaging directly with staff.

Listening to operatives’ experiences will identify inefficiencies and build trust. And embedding this intelligence into procurement programmes supports culture change – motivating frontline staff to adopt new practices and reduce overall contract leakage. Demonstrations, mentoring, clarification around responsibilities and better lines of communication can all reinforce this shift, ensuring materials contracts deliver efficiencies over the long term.