Delivering value through collaborative working in social housing
Research by Dr Meehan, Dr Menzies, and Dr Pinnington identifies that procurement’s ‘compliance’ focus delivers minimal value in the UK social housing sector. In particular the integration of housing, social care and health is suboptimal. Two core areas of impact are the introduction of new commercial services by consortia and the creation of regional public policy. The Impact collectively reaches over 1000 organizations. Financial impacts to consortia and providers total £14million, with £52 million cashable savings accruing to service users. New value-based procurement approaches reach 90% of UK social housing stock. The research instrumentally shaped the Older Person’s Housing Strategy for Conwy Borough supporting an additional 15% of older people.
There are 4.1 million social housing properties in the UK. This relatively new sector has a complex operating environment, is government-regulated ans subject to EU public procurement rules. Most organizations use third-party procurement providers/consortia to access framework agreements to purchase goods and services. However, this sector suffers systemic issues, in part owing to a public sector legacy and lack of investment in commercial expertise. Specific issues include the limited procurement experitise; narrow views on procurement value concerned only with compliant tender processes; the separation of health/social care provision from housing; and an expanding regulatory remit covering regeneration and economic growth. Most social housing providers lack procurement expertise and use consortia to access framework agreements to purchase goods and services. Although consortia provide EU-compliant frameworks the value achieved through procurement was limited. The separation of housing from local councils also sub-optimised issues around social care and heatlh, particularly for older housing tenants.
Research conducted by ULMS staff suggests that social housing organizations have historically been shielded from commercial realities in their procurement decisions. Procurement often has low status, minimal influence and the focus by social housing leaders is on process compliance despite spend profiles that are of economic importance. Austerity, new market structures, and the opening of public service provision to private organizations demands new business thinking, value-creating approaches, and collaborative structures to leverage commercial outcomes. Research findings also highlight the tensions for social housing organizations taking an overly commercial approach, as providers need to deliver social benefit to tenants to address broader problems of unemployment and poverty and it identifies unintended consequences on non-business stakeholders, beyond company-centric measures, that can destroy value for tenants and communities.
This research has also developed frameworks for procurement consortia, leveraging knowledge, and social capital as key considerations in developing more sustainable procurement policies. This includes models for integrating social housing, social care and health and models of collaboration to optimise the use of warden services across the supply network to drive sustainable value for tenants through early intervention in health issues and be commercially viable for providers.
The research team have worked collaboratively with key players in the UK social housing sector, including procurement consortia (Procurement for Housing [PfH], Re:allies), social housing providers (Cartrefi Conwy, Liverpool Mutual Homes), professional bodies (Chartered Institute of Housing, Chartered Institute of Procurement and Supply, Housemark, National Housing Federation), and public authorities (Conwy Borough Council, Northern Ireland Housing Executive), to develop a body of work that highlights the value potential of collaborative procurement and operations.
As a direct result of the research around value-dissonance, participant organizations changed their business services and created new service offerings that provide deeper insights to clients through tender support, asset management supply chain reviews, merger planning and spend analysis, including new technology services, that offer real-time data, analytics, spend profiling and price controls. Others changed working models and strategies on the basis of this research.
The impact further included increased turnover, savings, and job protection, in particular in a largely rural community, as well as the retention of warden services in sheltered housing, protecting further jobs and improving the service provision to housing tenants. Changes also included revision of policies for older people to be eligible for support and improved access to a service designed to prevent unnecessary health deterioration through early intervention.
Moreover, this research initiated changes to staff recruitment and training provision which, in one instance, led to a set of new value-based approaches to recruitment and training that have been implemented in the UK and an extension into a new business model to housing services in North America that will be implemented through a £6.5million 10-year contract. In another case, the research has directly led to new regional and national procurement policies on behalf of their member organizations (representing over 800,000 UK social housing properties) to embed social and commercial criteria into tenders and contracts.
Work continues on a wider policy level, for instance on collaborative procurement in regulated environments which underpins Northern Ireland’s national policy for social housing procurement by the Northern Ireland Federation of Housing Associations, representing 134,000 homes.