Social housing firms form buying alliance
A NEW procurement alliance has been set up by three housing consortia which could reduce their costs and bring wider benefits to the communities they serve.
The alliance between three northern buying consortia – Fusion 21, Northern Housing Consortium and Procurement for Housing – will represent 1,170 social housing landlords.
Its aim is to reduce the amount of duplication when procuring goods and services, but it aims to link spending to wider social benefits including job creation, training for disadvantaged groups and supporting smaller local contractors.
The alliance will be the largest of its kind in the UK, representing over 70% of social housing stock in the country. It currently has 65 framework agreements in place, worth around £400m a year.
Initially, it will provide the central procurement point for retrofitting and gas servicing of homes. As it develops, it will aim to offer further joint frameworks and additional services for its members.
Fusion21, based in Knowsley; the Northern Housing Consortium in Sunderland and Procurement for Housing, based in Warrington have come together after research showed that some housing providers find the UK’s range of buying groups confusing, making the marketplace difficult to navigate and dis-aggregating demand.
The new alliance said its aim is to simplify the market without removing choice.
Dave Neilson, chief executive of Fusion21 said: “We wanted to replace the traditional focus on lowest price with a ‘triple bottom line’, ensuring the procurement muscle of the social housing sector is used to meet social, economic and environmental outcomes.”
Steve Malone, managing director of Procurement for Housing, said: “Over the last 10 years many housing buying consortia have been created to generate efficiencies by combining sector demand.
“Whilst the drivers behind this have been positive, the marketplace has become convoluted. Our alliance aims to cut through this.”
The first of these frames, Retrofit, is already live. The second for gas servicing is expected to be underway by April 2012.
