Housing Forum Partnering Toolkit Introduction

Consequences of not doing this

Social housing organisations are major procurers of construction services spending approximately £6.9b each year on Repairs, Maintenance and Improvement works. As construction clients they are vastly experienced in traditional procurement a method which in the past has been carried out by technical departments and relied on standardised documents, policies, systems and procedures developed over decades.

The greater focus on long term value and customer involvement and the success of recent government initiatives such as Rethinking Construction, Best Value, Decent Homes and the National Strategy for Local Government Procurement depend on the complete modernisation of corporate procurement policies.

Poor investment planning, traditional procurement policies and strategies, and wasteful client side processes will result in poor returns on investment in social and economic terms. It is worth noting that ... 'if you always do what you always did, you will always get what you always got!', as follows:

• Poor integration of design and construction processes
• Inadequate and costly risk allocation and management
• Unhealthy profitability levels for suppliers
• Resulting in:
  • Lengthy Contract overruns
  • Contractor claims
  • Serious overspends
  • Wasteful disputes and litigation
• High numbers of contract and long term maintenance defects
• Continuing high levels of customer dissatisfaction
• No long term learning or improvements in service or construction quality
• Criticism from government, funders, elected members, board members, inspectors and other stakeholders
• Continuing decline in industry recruitment training and retention
• Minimal opportunity significantly to improve the Industry’s Health and Safety record.
• Failure to meet the government‘s targets for Sustainable Communities.

What a miserable existence, not only for the customer - but also for the social housing client!

This situation could be avoided as noted by Ruskin as long ago as 1860, if the following philosophy is adopted:

"It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money - that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot - it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better."