Landlord will also cut contractors from 60 to 12 in bid to save £50m by 2023
Hyde £500m plan to overhaul repairs
Hyde Group is set to retender £500 million of repairs and maintenance work as part of a plan to save £50 million over 10 years.
The 48,000-home landlord will cut its roster of contractors from 60 to 12 as a result.
The organisation, which operates in London and the south east, will later this month place a notice in the Official Journal of the European Union inviting bids for the contracts. Bidders will be invited to an open day on 12 September with contracts expected to be awarded by the middle of 2013.
The move, which is the first time the group has procured as a single entity instead of through its three subsidiaries, aims to reduce costs through economies of scale and efficiencies.
Carol Carter, group director of housing at Hyde, said it will allow the group to ‘enhance our service to residents, while taking advantage of economies of scale and making operational efficiencies’.
The move follows housing association Circle, which announced in March that it was re-procuring work worth £1.2 billion to slash the number of contractors from 200 to five to save £120 million.
Alan Long, executive director of contractor Mears, said housing associations were increasingly looking to work with fewer contractors. ‘Organisations are looking to be creative to generate value for money,’ he added.
Wayne Hughes, managing director of consultancy Wayne Hughes Associates, agreed that landlords could produce savings by reducing the number of contractors they use but added that taking work in-house may be a better option due to value added tax savings.
‘The bigger the contract, the larger the value added tax saving which could have been achieved through doing the work in-house,’ he explained. Mr Hughes said appointing fewer contractors is riskier as associations would be hit harder in the event of a contractor collapsing.
Hyde’s in-house team will continue to do some work under the new arrangement.
Hyde’s decision comes as part of its One Hyde One Vision programme, which aims to improve customer service and saving money.
The programme has so far seen it centralise customer services, axing 20 posts in seven local offices, saving £5.5 million per year in operating costs. The association said this led to an increase in call handling satisfaction from 85 per cent to 90 per cent. The company is also gradually merging its subsidiaries as part of OHOV.
Disagreements over OHOV were understood to be the reason for the departure of ex-chief executive David Eastgate in December 2010.