Helping housing associations meet the efficiency challenge

There is no doubt that the Efficiency Agenda is here to stay. As the government seeks to “deliver” within increasing financial constraints, social landlords are increasingly expected to deliver more with less.

This presents a real challenge to housing associations to maintain the pace of savings which have been identified in the past. Many associations are looking to merger to secure further efficiency savings as well as looking to set-up local procurement/development consortia to secure further economies.

A considerable body of guidance exists in this area, two of which are considered below.

Firstly, the whole area of procurement in housing has gone through a fundamental change in recent years with the introduction of more partnering type contracts, confirmation that housing associations must comply with Official Journal of the European Union (OJEU) tendering limits and more recently the introduction of more innovative procurement methods such as e-auctions.

Much has been written regarding partnering and OJEU limits, however, very little has appeared on the significant cost savings that can be achieved through e-auctions.

E-auctions can provide an OJEU compliant online auction environment, enabling you to better manage and secure your purchases. Figures compiled by the Government’s Regional Centres for Excellence reveal that e-auctions can dramatically cut the cost of goods and services by an average of 25% and by much more in some cases. By following such a process, considerable cash savings can be delivered to new LSVT’s through their catch-up repair programmes, as well as maintenance and development programme spend to new and existing housing providers.

Secondly, there was the report from government on ‘A systematic approach to Service Improvement’ which detailed the results of ‘systems thinking’ from a number of pilots in social housing.

The report concluded: “The pilots indicate that Systems Thinking has the potential to deliver wholesale efficiencies in service delivery. The work undertaken in all three pilots demonstrates cashable and non-cashable efficiency gains and significant service improvements.”

As well as the role of systems thinking in delivering on the Gershon agenda with the cashable and non-cashable savings in annual efficiency statements, the report gives examples of the substantial changes in performance possible.

One ALMO in the study reduced the average end-to-end time for responsive repairs from 46 days to less than 6 days. Another social landlord cut void relet times from an average 50 days to 25 days. Similar improvements were seen with rent collection.

This kind of improvement will help in meeting the targets set by the Gershon review. In particular the efficiency gains arising out of removing waste from the system will contribute towards the Annual Efficiency Statements for management and maintenance.

Overall, therefore, whilst efficiency is a big challenge for all Housing Associations, there are tools out there that can help achieve this.