Morrison claims private-run social housing could save public purse £1.53bn
Repairs firm moves into management
Private sector involvement in social housing could create up to £1.53 billion in efficiency savings according to research from maintenance and facilities services provider Morrison.
The firm this week announced its intention to move into social housing management once the Tenant Services Authority’s new regulatory framework for social housing in England comes into full effect on 1 April.
Morrison’s core business is the repairs and maintenance of social housing, energy and waste management and facilities management of public buildings.
At present social landlords on the TSA’s existing register of providers and will automatically transfer to a new register once the new framework comes into force. However, the regulation changes also open up the possibility of private firms such as Morrison entering the sector.
The firm’s initial calculations on potential savings are based on a joint Housing Corporation/Audit Commission report which claimed up to £100 per property per year could be saved on the management of social housing through better procurement of housing management services.
Morrison says there is little evidence that social landlords and local authorities, which make up the majority of the sector, have had their efficiency tested in open competition.
Guy Wakeley, chief executive of Morrison, said: ‘This lack of competition and accountability is affecting quality and resulting in inefficiencies and high costs throughout the social housing management market.’
A spokesperson for the TSA said it welcomed any initiative that would provide better value services for tenants and providers. ‘If a new contractor is able to offer high quality services more cheaply than current providers then we are sure that many organisations will be interested,’ she said.
Gwyneth Taylor, policy officer at the National Federation of ALMOs, warned that moving into the sector would be a big step for Morrison, adding that there was a ‘huge difference’ between being a maintenance firm and a management firm.
‘There are some small niche areas where private firms operate and provide a specialist service but it’s a small part of the sector. I would be surprised to see the private sector make the move into housing management like that because there is not enough money in it for them,’ she added.
How Morrison believes savings could be made
£900 million
The amount that could be saved by housing associations through better procurement and management
£630 million
The amount that could be saved through better procurement and mangement by local authorities and arm’s-length management organisations
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Readers' comments (1)
aburke | 19/02/2010 7:49 am
My alarm bells started ringing as soon as I read this. If the Audit Commission is recommending this then I would expect serious reductions in service quality whilst the shareholders prosper from any savings.
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