Delivering value through collaborative working in social housingWed 13th Feb 2019
Research conducted at the University of Liverpool Management School identifies that procurement’s ‘compliance’ focus delivers minimal value in UK social housing, and the integration of housing, social care and health is suboptimal. Two core areas of impact are the introduction of new commercial services by procurement consortia and the creation of regional public policy. This impact collectively reaches more than 1000 organisations. Financial impacts to procurement consortia and social housing providers total £14 million, with £48 million cashable savings accruing to social housing providers. New value-based procurement approaches adopted reach 90% of UK social housing stock. The research instrumentally shaped the Older Person’s Housing Strategy for Conwy Borough supporting an additional 15% older people.
The context and issue
The UK social housing sector in its current form is relatively new, being formed following the Housing Acts that enabled the transfer of housing stock from local councils to not-for-profit Housing Associations, whilst still being government regulated and subject to EU procurement rules. The majority of housing stock transfers took place after 2011. The sector suffers systemic issues, in part owing to a public sector legacy and lack of investment in commercial expertise. Specific issues include: limited procurement expertise and resource, narrow views on procurement value concerned predominantly with compliant tender processes, the separation of health/social care provision from housing, and an expanding regulatory remit covering regeneration and economic growth. Many social housing providers lack procurement expertise and resource and use consortia to access framework agreements to purchase goods and services. Although consortia provide EU-compliant frameworks, the value achieved through procurement was often limited. The separation of housing from local councils also sub-optimised value-based decisions around social care and health, particularly for older housing tenants.
Dr Meehan worked collaboratively on a deep long-term basis with Procurement for Housing (PfH), the leading procurement consortium (reaching 90% of the UK market) to research the tensions between commercial and social value and develop new sustainable procurement solutions that embed value at its centre. A smaller consortium (Re:allies) was also a research partner from 2015-16 to further test the social benefits around a value proposition. In parallel, two action-based research projects were undertaken with Cartrefi Conwy. Cartrefi Conwy represented a ‘typical’ social housing association with over 3800 properties covering urban and rural areas and an elderly tenant population. One project, through a funded PhD, developed a commercially sustainable model to integrate housing, social care and health, and the other, through a Knowledge Transfer Partnership (KTP), developed and commercialised an in-house repairs service rather than procure from external providers.
Engagement designed for impact
- Research-based whitepapers published across the social housing sector to reach policymakers, CEOs, CPOs, CFOs, and practitioners
- Thought Leadership pieces in social housing and procurement publications
- UK-wide keynote talks via high-profile networks and professional bodies to research findings
- Public debate event on social housing for 300 delegates including tenants, CEOs, voluntary organisations, policy makers, councillors and procurers.
Benefits and Impact
As a direct result of the value-based research, PfH changed their business model and services “cradle-to-grave” and created two new commercial offers. A consultancy service adopts the value model developed in the research to provide deep insights to clients through tender support, asset management supply chain reviews, merger planning and spend analysis. Technology services, highlighted in the research through social capital and leveraging knowledge, was addressed by the acquisition of a procurement software business (Valueworks) to offer real-time data, analytics, spend profiling and price controls.
Cartrefi Conwy applied the collaborative network model advocated in the research to redesign a warden service, and adopted the proposed Older Person’s Housing Strategy for Conwy Borough agreed by the North Wales Cabinet and implemented across the county.
Impacts to beneficiaries
- For Cartrefi Conwy the KTP research secured new business of £5.7million, increased turnover by £670k, delivered savings of £800k and protected twenty full-time jobs in a largely rural community.
- The Older Persons’ Housing Strategy secured the retention and development of warden services. Older people in the Conwy Borough no longer need to move to sheltered housing to be eligible for support. Access to support has increased by 15% and the new services prevent unnecessary health deterioration through early intervention.
- PfH’s new value-based approaches have changed how they recruit and train all staff, and the services have been rolled out across their management of £261million client spend p/a impacting 90% of UK social housing stock (3.9million of total 4million homes). PfH have extended this new business model to North America through a £6.5million 10-year contract.
- PfH’s introduction of new consultancy and technology services have been rolled out to circa 100 of their 800 clients, reporting £48million cashable savings accruing to service users in 2017.
- The body of work on collaborative value-based procurement in regulated environments underpins Northern Ireland’s national policy for social housing procurement by the Northern Ireland Federation of Housing Associations, representing 134,000 homes.
- The work with Re:allies consortia has directly led to new regional and national procurement policies on behalf of their member organisations (representing over 800,000 UK social housing properties) to embed social and commercial criteria into tenders and contracts.