NEARLY 12 months on from the Comprehensive Spending Review and many in the social housing sector have felt the impact of the Government’s spending cuts.
In many cases in the North East and across the country, this has resulted in budgets being reduced at a time when there is increasing demand for social housing.
These cuts have, and continue to, require registered social landlords to improve their asset management and look at strengthening and streamlining their operations.
One option, which could help cut costs whilst improving efficiency, is an increase in the use of outsourcing says Gordon Brockington, a director of Morrison – the leading provider for responsive repairs in the UK.
“Already used widely in many areas, such as highways and social care, outsourcing can deliver significant cost savings whilst maintaining a high level of service.”
Recent research into outsourcing within the social housing sector, which was compiled on behalf of Morrison by Credo, revealed that an additional £1.8bn could be saved across all social housing landlords, if there was a move to bolder models of outsourcing and if there was an increase in outsourcing across the sector.
The research found that despite the potential for savings, presently only 60% of local authorities, arms-length management organisations and housing associations currently outsource their housing maintenance and service management.
Brockington explains that this means that only around £8b of the £13b which will be spent this year by the UK’s social housing providers is currently outsourced.
Despite this, the savings generated from this level of outsourcing are still quite considerable at £1.1b.
“At present, the majority of outsourcing in the social housing sector is limited to the delivery of specific areas of work, such as repairs and maintenance services, with little integration between the external provider and the local authority.
“Whilst this traditional approach can deliver material savings of around 10-15%, the real benefits of outsourcing both in terms of quality of service for tenants and financial savings will only be seen when integrated partnerships are created.
“These partnerships can broadly be split into two approaches; collaborative – where the external provider inputs into the service rather than just undertaking actions prescribed by landlords, and transformational – where the external provider will effectively manage the outsourced service on behalf of the landlord.
“Both provide cost savings and heightened service delivery to the housing provider and its tenants, however, it is transformational models which offer the greatest savings and efficiencies.”