Blog: Getting the most from social housing procurement
By Andrew Carlin, commercial director of PfH Scotland
For many people the word ‘procurement’ equates to buying and regulation. It’s often seen as the end point of a business process, purchasing the products or services that are needed in a project and doing so in a manner that doesn’t break the rules.
Social housing procurement does include this transactional activity – but, given the chance, it can be so much more. Our perceptions of what procurement is for, can, and do, limit its potential to make a fundamental difference to the business performance and overall financial health of a social landlord and ultimately the people it serves.
I believe it’s never been more important to challenge these perceptions given the value for money (VfM) debate that is now taking place across the sector. The Scottish Housing Regulator is developing a framework on VfM that should be announced during the coming months.
We know it will be tenant centred and that it will consider areas such as rent levels and the quality of services provided to customers. Finding tangible ways to demonstrate VfM has always been a challenge and yet procurement offers so many avenues – a subject my organisation will be staging a debate on later this month at PfH Live.
PfH Scotland is currently working with HouseMark Scotland, CIH Scotland and Wheatley Group to draw on best practice and explore how landlords can prepare for the new standard and build evidence of impact.
Procurement teams can, of course, contribute directly to improving efficiency and reducing costs in order to benefit the bottom line. But there’s a direct link between what I’d describe as smart procurement and the quality of service received by tenants. Those housing organisations that give procurement both a high profile and a strategic role across the business are more likely to have productive relationships with their supply chain that encourage innovation and constant improvement.
This modern approach to procurement encourages collaboration and engagement. It might take the form of including tenants in the tendering and selection process to ensure they play a key role in shaping and choosing the services they receive. Or it might involve the development of a more sophisticated, nurturing approach to supplier management where contractors are encouraged to work with social landlords rather than for them, with the aim of identifying new, creative ways to drive costs down and quality up.
Benchmarking against other social landlords is another key area connecting value for money and procurement. Comparing data on an organisation’s spend or its levels of tenant satisfaction can pinpoint areas for improvement and identify the extra value that some providers must strive to deliver. Benchmarking also allows landlords to begin connecting with each other and sharing ideas on how to deliver this extra value for money.
When you start adding up the links between how a housing organisation spends its money with the impact on the ground, it soon becomes obvious that procurement has to be part of the VfM equation. A truly strategic approach to procurement provides a clear line of sight across a landlord’s business and can spot opportunities to improve services to tenants, yet at the same time save money and make more of its spending power. Those providers who can manage their costs more effectively are more likely to maintain the high service standards and low rents so important to their customers.